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323Financial statements of Enel SpA
1Form and content of the financial statementsEnel SpA is a corporation (società per azioni) that operates in
the electricity and gas sector and has its registered office in
Viale Regina Margherita 137, Rome, Italy.
In its capacity as holding company, Enel SpA sets the strate-
gic objectives for the Group and its subsidiaries and coordi-
nates their activities. The activities that Enel SpA performs
in respect of the other Group companies as part of its ma-
nagement and coordination function, including with regard to
the Company’s organizational structure, can be summarized
as follows:
> holding company functions, associated with the coordi-
nation of governance processes at the Group level:
- Administration, Finance and Control;
- Human Resources and Organization;
- Communications;
- Legal and Corporate Affairs;
- Innovation and Sustainability;
- European Affairs;
- Audit;
> global business line functions, which are responsible
for coordination and development of their business in all
the geographical areas in which the Group operates:
- Global Infrastructure and Networks;
- Global Thermal Generation;
- Global Renewable Energy;
> global service functions, which are responsible at the
Group level for coordinating all information technology
and purchasing activities:
- Global Procurement;
- Global ICT.
Within the Group, Enel SpA meets liquidity requirements
primarily through cash flows generated by ordinary opera-
tions and the use of a range of sources of funds, while ma-
naging any excess liquidity appropriately.
As the Parent Company, Enel SpA has prepared the conso-
lidated financial statements of the Enel Group for the year
ending December 31, 2016, which form an integral part of
this Annual Report pursuant to Article 154-ter, paragraph 1,
of the Consolidated Law on Financial Intermediation (Legi-
slative Decree 58 of February 24, 1998).
On March 16, 2017, the Board of Directors authorized the pu-
blication of these financial statements at December 31, 2016.
These financial statements have undergone statutory audi-
ting by EY SpA.
Basis of presentation
The separate financial statements for the year ended De-
cember 31, 2016 have been prepared in accordance with
international accounting standards (International Accounting
Standards - IAS and International Financial Reporting Stan-
dards - IFRS) issued by the International Accounting Stan-
dards Board (IASB), the interpretations of the International Fi-
nancial Reporting Interpretations Committee (IFRIC) and the
Standing Interpretations Committee (SIC), recognized in the
European Union pursuant to Regulation 2002/1606/EC and in
effect as of the close of the year. All of these standards and
interpretations are hereinafter referred to as the “IFRS-EU”.
The financial statements have also been prepared in confor-
mity with measures issued in implementation of Article 9,
paragraph 3, of Legislative Decree 38 of February 28, 2005.
The financial statements consist of the income statement,
the statement of comprehensive income, the balance sheet,
the statement of changes in shareholders’ equity and the sta-
tement of cash flows and the related notes.
The assets and liabilities reported in the balance sheet are
classified on a “current/non-current“ basis, with separate re-
porting of assets held for sale and liabilities included in dispo-
sal groups held for sale, if any. Current assets, which include
cash and cash equivalents, are assets that are intended to
be realized, sold or consumed during the normal operating
cycle of the Company or in the 12 months following the close
of the financial year; current liabilities are liabilities that are
Notes to the separatefinancial statements
Annual Report 2016324
expected to be settled during the normal operating cycle of
the Company or within the 12 months following the close of
the financial year.
The income statement is classified on the basis of the nature
of costs, with separate reporting of net income/(loss) from
continuing operations and net income/(loss) from any discon-
tinued operations.
The indirect method is used for the statement of cash flows,
with separate reporting of any cash flows by operating, in-
vesting and financing activities associated with discontinued
operations, if any.
The income statement, the balance sheet and the statement
of cash flows report transactions with related parties, the de-
finition of which is given in the section “Accounting policies
and measurement criteria” for the consolidated financial sta-
tements.
The financial statements have been prepared on a going
concern basis using the cost method, with the exception of
items measured at fair value in accordance with IFRS-EU, as
explained in the measurement bases applied to each indivi-
dual item in the consolidated financial statements.
The financial statements are presented in euro, the functional
currency of the Company, and the figures shown in the notes
are reported in millions of euro unless stated otherwise.
The financial statements provide comparative information in
respect of the previous period.
2Accounting policies and measurement criteriaThe accounting policies and measurement criteria are the
same, where applicable, as those adopted in the prepara-
tion of the consolidated financial statements, to which the
reader should refer for more information, with the exception
of those regarding equity investments in subsidiaries, asso-
ciated companies and joint ventures.
Subsidiaries are all entities over which Enel SpA has control.
The Company controls an entity when it is exposed to or
has rights to variable returns deriving from its involvement
and has the ability, through the exercise of its power over
the investee, to affect its returns. Power is defined as ha-
ving the concrete ability to direct the significant activities of
the entity by virtue of the existence of substantive rights.
Associates comprise those entities in which Enel SpA has
a significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of
investees but not exercise control or joint control over those
entities.
Joint ventures are entities over which Enel SpA exercises
joint control and has rights to the net assets of the enti-
ties. Joint control means sharing control of an arrangement,
which only exists when the decisions over the relevant ac-
tivities require the unanimous consent of all the parties that
share control.
Equity investments in subsidiaries, associates and joint
ventures are measured at cost. Cost is adjusted for any im-
pairment losses, which are reversed where the reasons for
their recognition no longer obtain. The carrying amount re-
sulting from the reversal may not exceed the original cost.
Where the loss pertaining to Enel SpA exceeds the carrying
amount of the investment and the Company is obligated to
perform the legal or constructive obligations of the investee
or in any event to cover its losses, the excess with respect
to the carrying amount is recognized in liabilities in the pro-
vision for risks and charges.
In the case of a disposal, without economic substance, of
an investment to an entity under common control, any diffe-
rence between the consideration received and the carrying
amount of the investment is recognized in equity.
Dividends from equity investments are recognized in pro-
fit or loss when the shareholders’ right to receive them is
established.
Dividends and interim dividends payable to third parties are
recognized as changes in equity at the date they are appro-
ved by the Shareholders’ Meeting and the Board of Direc-
tors, respectively.
325Financial statements of Enel SpA
3Recent accounting standards For information on recent accounting standards, please refer to the corresponding section of the notes to the
consolidated financial statements.
Information on the Income StatementRevenue
4.a Revenue from sales and services - €197 million“Revenue from sales and services” breaks down as follows.
Millions of euro
2016 2015 Change
Services
Group companies 197 237 (40)
Non-Group counterparties - - -
Total revenue from sales and services 197 237 (40)
Revenue from “services” amounted to €197 million and
essentially regards services provided by the Company to
subsidiaries as part of its management and coordination
function and the rebilling of sundry expenses incurred by it
but pertaining to the subsidiaries. That revenue decreased
by €40 million compared with the previous year, mainly due
to a reduction of €69 million in revenue from communication
activities, reflecting the new organizational structure of the
Group, which transferred part of communication activities
from the holding company to the Countries. This factor was
partially offset by an increase of €30 million in revenue from
management fees and technical fees as a result of increased
activity with the foreign subsidiaries.
“Revenue from sales and services” breaks down by geo-
graphical area as follows:
> €129 million in Italy (€179 million in 2015);
> €46 million in the European Union (€30 million in 2015);
> €13 million in non-EU Europe (€8 million in 2015);
> €9 million in other countries (€20 million in 2015).
4.b Other revenue and income - €10 million“Other revenue and income” came to €10 million in 2016.
In both 2016 and the previous year it mainly regarded se-
conded personnel, up €2 million from the previous year (€8
million in 2015).
Annual Report 2016326
Costs
5.a Consumables - €1 millionPurchases of “consumables” came to €1 million, unchan-
ged from the previous year. They comprise purchases from
non-Group suppliers of consumable materials of various
kinds.
5.b Services, leases and rentals - €152 millionCosts for “services, leases and rentals” break down as follows.
Millions of euro
2016 2015 Change
Services 135 182 (47)
Leases and rentals 17 17 -
Total services, leases and rentals 152 199 (47)
Costs for “services”, totaling €135 million, concerned costs
for services provided by third parties in the amount of €73
million (€124 million in 2015) and services provided by Group
companies totaling €62 million (€57 million in 2015). More
specifically, the decrease in costs for services provided by
third parties, equal to €51 million, is mainly attributable to
the decline in advertising, communication and print cam-
paign (€37 million) and event organization costs, as a conse-
quence of the new organizational structure adopted by the
Group, which transferred part of communication activities
from the holding company to the Countries.
Costs for services rendered by Group companies increased
by €4 million mainly due to higher costs incurred in respect
of IT services and training provided by the subsidiary Enel
Italia Srl.
Costs for “leases and rentals” mainly comprise costs for le-
asing assets from the subsidiary Enel Servizi Srl and were
essentially unchanged on the previous year.
5.c Personnel - €166 millionPersonnel costs break down as follows.
Millions of euro
Notes 2016 2015 Change
Wages and salaries 108 97 11
Social security costs 35 30 5
Post-employment benefits 24 7 (4) 11
Other long-term benefits 24 14 11 3
Other costs and other incentive plans 25 2 42 (40)
Total 166 176 (10)
“Personnel” costs amounted to €166 million, a decrease of
€10 million compared with 2015, essentially the result of the
reduction of €40 million in “other costs and other incentive
plans”, due essentially to the lack of personnel signing up
for new early retirement schemes (€36 million). This incre-
ase was partly offset by an increase of €11 million in costs
in respect of “post-employment benefits”, which in 2015
had been impacted by the reversal of the provision for the
electricity discount (€10 million), and by an increase of €16
million in wages and salaries and the associated social se-
curity costs, mainly due to an expansion of the workforce.
The item “post-employment benefits” includes cost for
defined benefit plans and for defined contribution plans. In
more detail, costs for defined contribution plans amounted
to €6 million for 2016, an increase of €1 million compared
327Financial statements of Enel SpA
with 2015 as a result of the expansion of the workforce.
The table below shows the average number of employees
by category compared with the previous year, and the ac-
tual number of employees at December 31, 2016.
Average number Headcount
2016 2015 Change at Dec. 31, 2016
Senior managers 256 212 44 253
Middle managers 580 549 31 579
Office staff 335 337 (2) 338
Total 1,171 1,098 73 1,170
5.d Depreciation, amortization and impairment losses - €448 millionMillions of euro
2016 2015 Change
Depreciation 4 3 1
Amortization 12 9 3
Impairment losses 474 315 159
Reversals of impairment losses 42 - 42
Total 448 327 121
“Depreciation, amortization and impairment losses”,
amounting to €448 million, increased by €121 million com-
pared with the previous year (€327 million in 2015). More
specifically, amortization and depreciation totaled €16 mil-
lion, of which €4 million in respect of property, plant and
equipment and €12 million in respect of intangible assets,
an overall increase of €4 million on 2015. This mainly re-
flected an increase in the average stock of industrial patent
and intellectual property rights as a result of investment and
the entry into service of assets in the 2nd Half of 2015.
In 2016, “impairment losses” amounted to €474 million
and were accounted for by the writedown of the interest
in Enel Produzione SpA as a result of the price adjustment
on the sale of the interest in Slovenské elektrarne. In 2015,
impairment losses amounted to €315 million, reflecting the
impairment recognized on the investments in Enel Trade
SpA (€250 million) and Enel Ingegneria e Ricerca SpA (€65
million).
During the year, “reversals of impairment losses” amounted
to €42 million and were exclusively accounted for by the po-
sitive adjustment of the value of the interest in Enel Trade
SpA, essentially reflecting the improvement compared with
2015 in the energy outlook for commodities, especially in
the final months of the year.
For more information on the criteria adopted in determining
those losses and reversals, please see note 13 below.
5.e Other operating expenses - €17 million“Other operating expenses” amounted to €17 million, down
€7 million on the previous year, mainly due to a reduction
of €4 million in association dues paid in 2016 and the upda-
ting of estimates of positions arising in previous years in
respect of the litigation provision, which was performed on
the basis of the advice of internal and external legal counsel,
involving net reversals of €2 million.
Operating income amounted to a negative €577 million, a deterioration of €95 million compared with the previous
year, essentially due the joint impact of the recognition in 2016 of greater impairment losses on equity investments in
the amount of €159 million and a reduction of €57 million in costs in 2016 for personnel and rental and leases.
Annual Report 2016328
6. Income from equity investments - €2,882 millionIncome from equity investments, amounting to €2,882 mil-
lion, collected in full in 2016, regards dividends approved by
the shareholders’ meetings of the subsidiaries, associated
and other entities (€2,532 million) and the special dividend
distributed in September 2016 by Enel Iberoamérica SL
(€350 million).
Millions of euro
2016 2015 Change
Dividends from subsidiaries and associates 2,876 2,023 853
Enel Produzione SpA 304 - 304
e-distribuzione SpA 1,610 1,245 365
Enel.Factor SpA 3 - 3
Enel Italia Srl - 9 (9)
Enel Energia SpA 358 159 199
Enel Green Power SpA 50 109 (59)
Enel Iberoamérica SL 550 500 50
CESI SpA 1 1 -
Dividends from other entities 6 1 5
Emittenti Titoli SpA 6 1 5
Total 2,882 2,024 858
7. Net financial income/(expense) from derivatives- €(340) millionThis item breaks down as follows.
Millions of euro
2016 2015 Change
Income from derivatives:
- on behalf of Group companies: 2,515 2,813 (298)
- income from derivatives at fair value through profit or loss 2,515 2,813 (298)
- on behalf of Enel SpA: 272 545 (273)
- income from fair value hedge derivatives 32 33 (1)
- income from cash flow hedge derivatives 158 435 (277)
- income from derivatives at fair value through profit or loss 82 77 5
Total income from derivatives 2,787 3,358 (571)
Expense on derivatives:
- on behalf of Group companies: 2,520 2,824 (304)
- expense on derivatives at fair value through profit or loss 2,520 2,824 (304)
- on behalf of Enel SpA: 607 200 407
- expense on fair value hedge derivatives 27 27 -
- expense on cash flow hedge derivatives 497 102 395
- expense on derivatives at fair value through profit or loss 83 71 12
Total expense from derivatives 3,127 3,024 103
TOTAL NET FINANCIAL INCOME/(EXPENSE) FROM DERIVATIVES (340) 334 (674)
329Financial statements of Enel SpA
Net expense from derivatives amounted to €340 million
(compared with net income of €334 million in 2015) and es-
sentially reflects the net expense from derivatives entered
into on behalf of Enel SpA.
The negative change of €674 million over 2015 reflected hi-
gher net expense on cash flow hedge derivatives (€672 mil-
lion), all entered into on behalf of Enel SpA on both interest
rates and exchange rates.
For more details on derivatives, please see note 31 “Finan-
cial instruments” and note 33 “Derivatives and hedge ac-
counting“.
8. Other net financial income/(expense) - €(423) millionThis item breaks down as follows.
Millions of euro
2016 2015 Change
Other financial income
Interest income
Interest income on long-term financial assets 4 5 (1)
Interest income on short-term financial assets 42 65 (23)
Total 46 70 (24)
Positive exchange rate differences 398 5 393
Income on fair value hedges - post-hedge adjustment 8 4 4
Other financial income 104 98 6
Total other financial income 556 177 379
Other financial expense
Interest expense
Interest expense on bank borrowings 32 25 7
Interest expense on bonds 840 930 (90)
Interest expense on other borrowings 54 1 53
Total 926 956 (30)
Negative exchange rate differences 44 279 (235)
Interest expense on post-employment and other employee benefits 6 6 -
Other financial expense 3 2 1
Total other financial expense 979 1,243 (264)
TOTAL OTHER NET FINANCIAL INCOME/(EXPENSE) (423) (1,066) 643
Other net financial expense amounted to €423 million,
mainly reflecting interest expense on borrowings (€926 mil-
lion), partly offset by positive exchange rate differences in
the amount of €398 million and by other financial income
on guarantees granted on behalf of Group companies in the
amount of €94 million. The decrease of €643 million in net fi-
nancial expense over 2015 primarily reflected the combined
impact of the increase of €393 million in exchange rate gains
and the decrease of €235 million in exchange rate losses,
both on hedged loans denominated in foreign currencies,
which were affected by the positive developments in the
euro against the dollar and the pound sterling.
Annual Report 2016330
9. Income taxes - €(178) million
Millions of euro
2016 2015 Change
Current taxes (184) (197) 13
Deferred tax income 6 (2) 8
Deferred tax expense - (2) 2
Total (178) (201) 23
Income taxes for 2016 showed a creditor position of €178
million, mainly as a result in the reduction in the tax base
for the corporate income tax (IRES) compared with income
before taxes due to the exclusion of 95% of the dividends
received from the subsidiaries and the deductibility of Enel
SpA’s interest expense for the Group’s consolidated taxation
mechanism in accordance with corporate income tax law
(Article 96 of the Uniform Income Tax Code).
The decrease of €23 million compared with the previous
year (a creditor position of €201 million) is largely attributable
to non-recurring items.
The following table reconciles the theoretical tax rate with
the effective tax rate.
Millions of euro
2016 % rate 2015 % rate
Income before taxes 1,542 810
Theoretical corporate income taxes (IRES) (27.5%) 424 27.5% 223 27.5%
Tax decreases:
- dividends from equity investments (753) -48.8% (529) -65.3%
- prior-year writedowns (13) -0.8% (10) -1.2%
- other (7) -0.5% (11) -1.4%
Tax increases:
- writedowns/(writebacks) for the year 119 7.7% 86 10.6%
- accruals to provisions 7 0.5% 17 2.1%
- prior-year expense 3 0.2% 2 0.2%
- other 25 1.6% 32 4.0%
Total current corporate income taxes (IRES) (195) -12.6% (190) -23.5%
IRAP - - - -
Difference on estimated income taxes from prior years 11 0.7% (7) -0.9%
Total deferred tax items 6 0.4% (4) -0.5%
- of which impact of change in tax rate 1 7
- of which changes for the year 5 (11)
TOTAL INCOME TAXES (178) -11.5% (201) -24.8%
331Financial statements of Enel SpA
Information on the Balance SheetAssets
10. Property, plant and equipment - €9 million
Developments in property, plant and equipment for 2015 and 2016 are set out in the table below.
Millions of euro Land BuildingsPlant and
machinery
Industrial and commercial equipment Other assets
Leasehold improvements Total
Cost 1 3 3 5 19 33 64
Accumulated depreciation - (2) (3) (5) (18) (28) (56)
Balance at Dec. 31, 2014 1 1 - - 1 5 8
Capital expenditure - - - - - 2 2
Depreciation - - - - - (3) (3)
Total changes - - - - - (1) (1)
Cost 1 3 3 5 19 35 66
Accumulated depreciation - (2) (3) (5) (18) (31) (59)
Balance at Dec. 31, 2015 1 1 - - 1 4 7
Capital expenditure - - - - 1 5 6
Depreciation - - - - (1) (3) (4)
Total changes - - - - - 2 2
Cost 1 3 3 5 20 40 72
Accumulated depreciation - (2) (3) (5) (19) (34) (63)
Balance at Dec. 31, 2016 1 1 - - 1 6 9
“Property, plant and equipment” totaled €9 million, an incre-
ase of €2 million compared with the previous year, essen-
tially attributable to the positive net balance between capital
expenditure during the year (€6 million) and depreciation for
the period (€4 million). “Leasehold improvements” mainly
regard the renovation and redevelopment of a number of
buildings housing Enel SpA’s headquarters.
Annual Report 2016332
11. Intangible assets - €18 million
“Intangible assets”, all of which have a finite useful life, break down as follows.
Millions of euro
Industrial patents and intellectualproperty rights
Other intangible assets under development Total
Balance at Dec. 31, 2014 10 1 11
Capital expenditure - 13 13
Assets entering service 13 (14) (1)
Amortization (9) - (9)
Total changes 4 (1) 3
Balance at Dec. 31, 2015 14 - 14
Capital expenditure 9 7 16
Assets entering service - - -
Amortization (12) - (12)
Total changes (3) 7 4
Balance at Dec. 31, 2016 11 7 18
“Industrial patents and intellectual property rights”, in the
amount of €11 million at December 31, 2016, relate mainly
to costs incurred in purchasing software as well as related
evolutionary maintenance. Amortization is calculated on a
straight-line basis over the item’s residual useful life (three
years on average).
The amount of the item decreased by €3 million as compa-
red with the previous year, essentially attributable to amorti-
zation for the year (€12 million), partly offset by investment
for the year amounting to €9 million. The investments es-
sentially relate to software systems to manage consolidated
and global reporting, risk and centralized finance systems.
“Other intangible assets under development” at December
31, 2016 totaled €7 million. They essentially regarded the
Evolution for Energy (E4E) project, which was undertaken
at the global level to harmonize and integrate processes and
systems to support the global business lines and the Ad-
ministration, Finance and Control, and Global Procurement
functions (€3 million), as well as the New PRIMO project (€1
million), and other projects connected with the evolution of
software associated with existing systems.
333Financial statements of Enel SpA
12. Deferred tax assets and liabilities - €370 million and €246 million
Changes in deferred tax assets and deferred tax liabilities, grouped by type of timing difference, are shown below.
Millions of euro
atDec. 31, 2015
Increase/(Decrease) taken to income
statementIncrease/(Decrease)
taken to equity Other changesat
Dec. 31, 2016
Total Total
Deferred tax assets
Nature of temporary differences:
- accruals to provisions for risks and charges and impairment losses 8 (1) - (1) 6
- derivatives 301 - (2) - 299
- costs for capital increase - - 2 - 2
- other items 64 (5) 3 1 63
Total 373 (6) 3 - 370
Deferred tax liabilities
Nature of temporary differences:
- measurement of financial instruments 284 - (45) - 239
- other items 7 - - - 7
Total 291 - (45) - 246
Excess net deferred IRES tax assets after any offsetting 136 169
Excess net deferred IRAP tax liabilities after any offsetting (54) (45)
“Deferred tax assets” totaled €370 million (€373 million at
December 31, 2015), a decrease of €3 million compared with
the previous year, mainly attributable to a reduction of €6 mil-
lion, recognized in profit or loss, in deferred tax assets con-
nected with provisions for risks and impairment losses, as
well as other items, and an increase of €3 million in deferred
tax assets recognized in equity, of which €2 million in respect
of the tax provision on the transaction costs incurred by the
Company in 2016 as a result of the non-proportional partial
demerger of Enel Green Power SpA to Enel SpA, which in-
creased the capital of the Parent Company by €763 million.
“Deferred tax liabilities” totaled €246 million (€291 million at
December 31, 2015), a decrease of €45 million, due largely to
the recognition of deferred taxes on the fair value measure-
ment of cash flow hedge financial instruments.
The amount of deferred tax assets and liabilities was de-
termined by applying a rate of 24% for IRES. IRAP was ap-
plied on deferred tax liabilities only at a rate of 5.57% (taking
account of regional surtaxes). The amount of deferred tax
assets was determined without applying IRAP, as in the co-
ming years we do not expect to earn income subject to IRAP
sufficient to reverse the temporary deductible differences.
Annual Report 2016334
13. Equity investments - €42,793 million
The table below shows the changes during the year for each
investment, with the corresponding values at the beginning
and end of the year, as well as the list of investments held in
subsidiaries, associates and other companies.
Millions of euroOriginal
cost(Writedowns)/
Revaluations
Other changes - IFRIC 11 and
IFRS 2Carrying amount % holding
Capital contributions
and loss coverage
Acquisitions/(Disposals)/
(Settlements)/(Repayments)
Formation/Contributions
(+/-)/Mergers (+/-)/Demergers(+/-)
Value adjustments Reclassification Balance
Originalcost
(Writedowns)/Revaluations
Other changes -
IFRIC 11 and IFRS 2
Carrying amount % holding
at Dec. 31, 2015 Changes in 2016 at Dec. 31, 2016
A) Subsidiaries
Enel Produzione SpA 4,892 (512) 4 4,384 100.0 - - - (474) - (474) 4,892 (986) 4 3,910 100.0
Enel Ingegneria e Ricerca SpA 86 (84) 1 3 100.0 - - - - - - 86 (84) 1 3 100.0
e-distribuzione SpA 4,054 - 2 4,056 100.0 - - - - - - 4,054 - 2 4,056 100.0
Enel Servizio Elettrico SpA 110 - - 110 100.0 - - - - - - 110 - - 110 100.0
Enel Trade SpA 1,401 (250) 1 1,152 100.0 - - - 42 - 42 1,401 (208) 1 1,194 100.0
Enel Green Power SpA 3,640 - 2 3,642 68.3 - 3,881 (983) - - 2,898 6,538 - 2 6,540 100.0
Enel Green Power International BV - - - - - - - - - - - - - - - -
Enel Investment Holding BV 8,498 (4,473) - 4,025 100.0 - - - - - - 8,498 (4,473) - 4,025 100.0
Enelpower SpA 189 (159) - 30 100.0 - - - - - - 189 (159) - 30 100.0
OpEn Fiber SpA 5 - - 5 100.0 360 - - - (365) (5) - - - - -
Enel Energia SpA 1,321 (8) - 1,313 100.0 - - - - - - 1,321 (8) - 1,313 100.0
Enel Iberoamérica SL 18,300 - - 18,300 100.0 - - - - - - 18,300 - - 18,300 100.0
Enel.Factor SpA 18 - - 18 100.0 - - - - - - 18 - - 18 100.0
Enel Sole Srl 5 - - 5 100.0 - - - - - - 5 - - 5 100.0
Enel Italia Srl 525 (41) 3 487 100.0 - - - - - - 525 (41) 3 487 100.0
Enel.NewHydro Srl 70 (54) - 16 100.0 - - - - - - 70 (54) - 16 100.0
Enel Finance International NV 1,414 - - 1,414 100.0 - - 983 - - 983 2,397 - - 2,397 100.0
Total 44,528 (5,581) 13 38,960 360 3,881 - (432) (365) 3,444 48,404 (6,013) 13 42,404
B) Joint ventures
OpEn Fiber SpA - - - - - - - - - 365 365 365 - - 365 50.0
Total - - - - - - - - 365 365 365 - - 365
C) Associates
CESI SpA 23 - - 23 42.7 - - - - - - 23 - - 23 42.7
Total 23 - - 23 - - - - - - 23 - - 23
D) Other companies
Elcogas SA 5 (5) - - 4.3 - - - - - - 5 (5) - - 4.3
Emittenti Titoli SpA 1 - - 1 10.0 - - - - - - 1 - - 1 10.0
Idrosicilia SpA - - - - 1.0 - - - - - - - - - - 1.0
Total 6 (5) - 1 - - - - - - 6 (5) - 1
TOTAL 44,557 (5,586) 13 38,984 360 3,881 - (432) - 3,809 48,798 (6,018) 13 42,793
335Financial statements of Enel SpA
Millions of euroOriginal
cost(Writedowns)/
Revaluations
Other changes - IFRIC 11 and
IFRS 2Carrying amount % holding
Capital contributions
and loss coverage
Acquisitions/(Disposals)/
(Settlements)/(Repayments)
Formation/Contributions
(+/-)/Mergers (+/-)/Demergers(+/-)
Value adjustments Reclassification Balance
Originalcost
(Writedowns)/Revaluations
Other changes -
IFRIC 11 and IFRS 2
Carrying amount % holding
at Dec. 31, 2015 Changes in 2016 at Dec. 31, 2016
A) Subsidiaries
Enel Produzione SpA 4,892 (512) 4 4,384 100.0 - - - (474) - (474) 4,892 (986) 4 3,910 100.0
Enel Ingegneria e Ricerca SpA 86 (84) 1 3 100.0 - - - - - - 86 (84) 1 3 100.0
e-distribuzione SpA 4,054 - 2 4,056 100.0 - - - - - - 4,054 - 2 4,056 100.0
Enel Servizio Elettrico SpA 110 - - 110 100.0 - - - - - - 110 - - 110 100.0
Enel Trade SpA 1,401 (250) 1 1,152 100.0 - - - 42 - 42 1,401 (208) 1 1,194 100.0
Enel Green Power SpA 3,640 - 2 3,642 68.3 - 3,881 (983) - - 2,898 6,538 - 2 6,540 100.0
Enel Green Power International BV - - - - - - - - - - - - - - - -
Enel Investment Holding BV 8,498 (4,473) - 4,025 100.0 - - - - - - 8,498 (4,473) - 4,025 100.0
Enelpower SpA 189 (159) - 30 100.0 - - - - - - 189 (159) - 30 100.0
OpEn Fiber SpA 5 - - 5 100.0 360 - - - (365) (5) - - - - -
Enel Energia SpA 1,321 (8) - 1,313 100.0 - - - - - - 1,321 (8) - 1,313 100.0
Enel Iberoamérica SL 18,300 - - 18,300 100.0 - - - - - - 18,300 - - 18,300 100.0
Enel.Factor SpA 18 - - 18 100.0 - - - - - - 18 - - 18 100.0
Enel Sole Srl 5 - - 5 100.0 - - - - - - 5 - - 5 100.0
Enel Italia Srl 525 (41) 3 487 100.0 - - - - - - 525 (41) 3 487 100.0
Enel.NewHydro Srl 70 (54) - 16 100.0 - - - - - - 70 (54) - 16 100.0
Enel Finance International NV 1,414 - - 1,414 100.0 - - 983 - - 983 2,397 - - 2,397 100.0
Total 44,528 (5,581) 13 38,960 360 3,881 - (432) (365) 3,444 48,404 (6,013) 13 42,404
B) Joint ventures
OpEn Fiber SpA - - - - - - - - - 365 365 365 - - 365 50.0
Total - - - - - - - - 365 365 365 - - 365
C) Associates
CESI SpA 23 - - 23 42.7 - - - - - - 23 - - 23 42.7
Total 23 - - 23 - - - - - - 23 - - 23
D) Other companies
Elcogas SA 5 (5) - - 4.3 - - - - - - 5 (5) - - 4.3
Emittenti Titoli SpA 1 - - 1 10.0 - - - - - - 1 - - 1 10.0
Idrosicilia SpA - - - - 1.0 - - - - - - - - - - 1.0
Total 6 (5) - 1 - - - - - - 6 (5) - 1
TOTAL 44,557 (5,586) 13 38,984 360 3,881 - (432) - 3,809 48,798 (6,018) 13 42,793
Annual Report 2016336
The table below reports changes in equity investments in 2016.
Millions of euro
Increases
Partial non-proportional demerger of Enel Green Power SpA (“EGP SpA”) to Enel SpA - Acquisition of portion of EGP SpA (31.7%) held by non-controlling shareholders 3,881
Partial non-proportional demerger of Enel Green Power SpA to Enel SpA - Assignment of total interest in Enel Green Power International BV 5,475
Demerger from Enel Green Power International BV of assets and liabilities to Enel Finance International NV 983
Cross-border merger of Enel Green Power International BV into Enel Green Power SpA 4,492
Recapitalization of OpEn Fiber SpA (formerly Enel OpEn Fiber SpA) 120
Capital contribution to OpEn Fiber SpA 236
Capitalization of transaction costs on interest in OpEn Fiber SpA 4
Reclassification of interest in OpEn Fiber from “subsidiary“ to “joint venture“ 365
Writeback of equity investment in Enel Trade SpA 42
Total 15,598
Decreases
Partial non-proportional demerger of Enel Green Power SpA to Enel SpA - Reduction in value of interest in Enel Green Power SpA (5,475)
Demerger from Enel Green Power International BV of assets and liabilities to Enel Finance International NV (983)
Cross-border merger of Enel Green Power International BV into Enel Green Power SpA (4,492)
Reclassification of interest in OpEn Fiber from “subsidiary“ to “joint venture“ (365)
Writedown of equity investment in Enel Produzione SpA (474)
Total (11,789)
NET CHANGE 3,809
In 2016 the value of investments in subsidiaries, associated
and other entities increased by €3,809 million as a result of:
> the partial non-proportional demerger of Enel Green Po-
wer SpA to Enel SpA with effect as from the last moment
of March 31, 2016, which involved:
- the acquisition by Enel SpA of the share of Enel Green
Power SpA held by non-controlling interests. Following
the transaction, Enel SpA became the sole shareholder
of Enel Green Power SpA;
- the assignment to Enel SpA of the 100% interest in the
Netherlands-registered Enel Green Power International
BV and the consequent adjustment of the value of the
interest in Enel Green Power SpA on the basis of the
reallocation between foreign and Italian assets, as pro-
vided for in the merger instrument;
> the demerger in October 2016 from Enel Green Power
International BV of assets and liabilities with a net value of
€983 million to Enel Finance International NV;
> the cross-border merger in October 2016 of Enel Green
Power International BV into Enel Green Power SpA, with
the consequent acquisition by the latter of all the assets,
liabilities, rights and obligations of the merged company
by way of universal succession. The merger also produ-
ced the extinction without liquidation of Enel Green Po-
wer International BV;
> the capital increase on July 7, 2016 of the subsidiary Enel
OpEn Fiber SpA (renamed OpEn Fiber SpA as from De-
cember 1, 2016) by way of payment on the intercompany
current account of €120 million. Subsequently, as provi-
ded for in the framework investment agreement signed
on October 10, 2016, by Enel SpA, Enel OpEn Fiber SpA,
CDP Equity SpA, FSI Investimenti SpA, F2i Fondi Italiani
per le Infrastrutture SGR SpA and Metroweb Italia SpA, a
capital increase reserved for CDP Equity SpA was carried
out in December 2016 in the amount of €125 million. In
order to permit the equal capitalization of OpEn Fiber SpA
by Enel SpA and CDP Equity SpA, as well as to give the
company the financial resources necessary to acquire the
entire share capital of Metroweb Italia SpA, in December
Enel SpA executed its share of a capital contribution of
337Financial statements of Enel SpA
€236 million. On December 20, 2016, OpEn Fiber SpA
completed the acquisition of the entire share capital of
Metroweb Italia SpA from F2i Fondi Italiani per le Infra-
strutture SGR SpA and FSI Investimenti SpA for about
€714 million. As from that date Enel SpA and CDP Equity
SpA hold equal interests in Open Fiber SpA. Accordingly,
the value of the interest (including transaction costs of €4
million) recognized in the accounts of Enel SpA has been
reclassified under joint ventures;
> a writeback of €42 million in the value of the interest held
in Enel Trade SpA to take account of the improvement in
the outlook for energy commodities compared with 2015;
> a writedown of €474 million in the value of the interest
held in Enel Produzione SpA in order to reflect the price
adjustment on the sale of Slovenské elektrarne. The wri-
tedown was calculated using a discounted cash flow mo-
del that confirmed the full recoverability of the residual
value, even though it was greater than the book equity
of the investee.
The following table reports the main assumptions used in de-
termining the impairment and reversal of impairment of Enel
Produzione SpA and Enel Trade SpA respectively.
Millions of euroOriginal
costGrowth
rate (1)
Discountrate pre-tax
WACC (2)
Explicit period of
cash flowsTerminal
value (3)
Original cost
Growth rate (1)
Discount rate pre-tax
WACC (2)
Explicit period
of cash flows
Terminal value (3)
at Dec. 31, 2016 at Dec. 31, 2015
Enel Produzione SpA 4,384 0.65% 9.65% 5 years Perpetuity - - - - -
Enel Trade SpA 1,152 1.70% 9.62% 5 years Perpetuity 1,402 1.90% 9.37% 5 years Perpetuity
(1) Perpetual growth rate of cash flows after explicit period.(2) Pre-tax WACC calculated using the iterative method: the discount rate that ensures that the value in use calculated with pre-tax cash flows is equal to that
calculated with post-tax cash flows discounted with the post-tax WACC.(3) The terminal value has been estimated on the basis of a perpetuity or an annuity with a rising yield for the years indicated in the column.
The recoverable value of the equity investments recognized
through the impairment tests was estimated by calculating
the equity value of the investments through an estimate
of their value in use using discounted cash flow models,
which involve estimating expected future cash flows and
applying an appropriate discount rate, selected on the basis
of market inputs such as risk-free rates, betas and market
risk premiums.
For the purpose of comparing value with the carrying
amount of the investments, the enterprise value resulting
from the estimation of future cash flows was converted into
the equity value by subtracting the net financial position of
the investee.
Cash flows were determined on the basis of the best in-
formation available at the time of the estimate and drawn
for the explicit period, from the 5-year 2017-2021 Business
Plan approved by the Board of Directors of the Parent Com-
pany containing forecasts for volumes, revenue, operating
costs, capital expenditure, industrial and commercial orga-
nization and developments in the main macroeconomic va-
riables (inflation, nominal interest rates and exchange rates)
and commodity prices. The explicit period of cash flows
considered in impairment testing was five years.
The terminal value was calculated as a perpetuity or annuity.
The share certificates for Enel SpA’s investments in Italian
subsidiaries are held in custody at Monte dei Paschi di Siena.
The following table reports the share capital and sharehol-
ders’ equity of the investments in subsidiaries, associates
and other companies at December 31, 2016.
Annual Report 2016338
Registered office Currency
Share capital (euro)
Shareholders’ equity
(millions of euro)
Prior year income/(loss) (millions of
euro) % holding
Carrying amount
(millions of euro)
A) Subsidiaries
Enel Produzione SpA Rome Euro 1,800,000,000 3,838 (379) 100.0 3,910
Enel Ingegneria e Ricerca SpA Rome Euro 30,000,000 21 (8) 100.0 3
e-distribuzione SpA Rome Euro 2,600,000,000 4,568 1,451 100.0 4,056
Enel Servizio Elettrico SpA Rome Euro 10,000,000 190 124 100.0 110
Enel Trade SpA Rome Euro 90,885,000 658 (104) 100.0 1,194
Enel Green Power SpA Rome Euro 272,000,000 6,610 50 100.0 6,540
Enel Investment Holding BV (1) Amsterdam Euro 1,593,050,000 4,710 284 100.0 4,025
Enelpower SpA Milan Euro 2,000,000 30 - 100.0 30
Enel Energia SpA Rome Euro 302,039 1,759 680 100.0 1,313
Enel Iberoamérica SL Madrid Euro 500,000,000 20,584 1,104 100.0 18,300
Enel.Factor SpA Rome Euro 12,500,000 53 4 100.0 18
Enel Sole Srl Rome Euro 4,600,000 78 15 100.0 5
Enel Italia Srl Rome Euro 50,000,000 408 23 100.0 487
Enel.NewHydro Srl Rome Euro 1,000,000 20 1 100.0 16
Enel Finance International NV Amsterdam Euro 1,478,810,370 2,006 45 100.0 2,397
B) Joint ventures
OpEn Fiber SpA Milan Euro 250,000,000 713 (7) 50.0 365
C) Associates
CESI SpA (2) Milan Euro 8,550,000 101 9 42.7 23
D) Other companies
Elcogas SA (2) Puertollano Euro 809,690 (105) (26) 4.3 -
Emittenti Titoli SpA (2) Milan Euro 4,264,000 72 63 10.0 1
Idrosicilia SpA (2) Milan Euro 22,520,000 46 3 1.0 -
(1) The figures for shareholders’ equity and the results for the period refer to the Group.(2) The figures for share capital, shareholders’ equity and net income refer to the financial statements at December 31, 2015.
The carrying amounts of the equity investments in Enel
Italia Srl, Enel Finance International NV, as well as those
in Enel Trade SpA and Enel Produzione SpA, are conside-
red to be recoverable even though they individually exceed
the value of the respective shareholders’ equity at Decem-
ber 31, 2016. This circumstance is not felt to represent an
impairment loss in respect of the investment but rather
a temporary mismatch between the two amounts. More
specifically:
> in the case of Enel Italia Srl it is attributable to the retroac-
tive application of “IAS 19 - Employee benefits” in 2013,
which involved the recognition of net actuarial losses and
the consequent impact on the companies’ shareholders’
equity. As these losses are not monetary in nature, they
will be recovered in future years with no cash outflow for
the subsidiaries;
> as to Enel Finance International NV, it is due essentially
to a decline in the fair value of a number of balance-sheet
items that are reflected in shareholders’ equity.
“Equity investments in other companies” at December 31,
2016 all regard unlisted companies and are measured at
cost, as the fair value cannot be reliably determined.
The investment in Elcogas was written off in 2014 and sin-
ce January 1, 2015 the company, in which Enel has a sta-
ke of 4.3%, has been in liquidation. The profit participation
loan of €6 million granted in 2014 has also been written
down to take account of accumulated losses.
339Financial statements of Enel SpA
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015
Equity investments in unlisted companies measured at cost 1 1
Elcogas SA - -
Emittenti Titoli SpA 1 1
Idrosicilia SpA - -
14. Derivatives - €2,469 million, €480 million, €3,082 million, €556 million
Millions of euro Non-current Current
at Dec. 31, 2016 at Dec. 31, 2015 at Dec. 31, 2016 at Dec. 31, 2015
Derivative financial assets 2,469 2,591 480 299
Derivative financial liabilities 3,082 2,717 556 367
For more details about the nature, recognition and classification of derivative financial assets and liabilities, please see notes
31 “Financial instruments” and 33 “Derivatives and hedge accounting”.
15. Other non-current financial assets - €53 million
The aggregate is composed of the following.
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Prepaid financial expense 21 30 (9)
Other non-current financial assets included in debt 15.1 32 77 (45)
Total 53 107 (54)
“Prepaid financial expense” is essentially accounted for by
residual transaction costs on the €10 billion revolving credit
facility agreed on April 19, 2010 between Enel, Enel Finance
International and Mediobanca, as well as those in respect
of the Forward Start Facility Agreement signed on February
8, 2013, and the subsequent renegotiation of the facility on
February 12, 2015 in the amount of €9.4 billion. The renego-
tiation involved a general reduction in the cost of the faci-
lity and extended its term until 2020. The item reports the
non-current portion of those costs and their reversal through
profit or loss depends on the type of fee involved and the
maturity of the credit line.
15.1 Other non-current financial assets included in debt - €32 million
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Financial receivables
Due from subsidiaries 31.1.1 27 72 (45)
Other financial receivables 5 5 -
Total 32 77 (45)
Annual Report 2016340
“Financial receivables due from subsidiaries”, amounting
to €27 million, refer to receivables in respect of the as-
sumption by Group companies of their share of financial
debt. The terms of the agreements call for the rebilling of
the related finance costs and the income and expenses ac-
crued on the interest rate risk hedging contracts, as well as
the repayment of the principal upon maturity of each loan.
At December 31, 2016, the entirety of this receivable regar-
ded the subsidiary Enel Italia Srl, as the principal amounts
pertaining to the other Group companies involved (Enel Pro-
duzione SpA, e-distribuzione SpA, Enel Sole Srl) had been
fully repaid as of that date.
The decrease of €45 million over December 31, 2015 is at-
tributable to the reduction of the amount of the receivable
as a result of repayment of principal and the reclassification
under other current financial assets of the portion of recei-
vables of Enel Italia Srl falling due within 12 months.
16. Other non-current assets - €188 million
This item can be broken down as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Tax receivables 34 244 (210)
Receivables from subsidiaries for assumption of supplementary pension plan liabilities 154 162 (8)
Other long-term receivables - 3 (3)
Total 188 409 (221)
“Tax receivables” regard the tax credit in respect of the
claim for reimbursement submitted by Enel SpA on its own
behalf for 2003 and on its own behalf and as the consolida-
ting company for 2004-2011 for excess income tax paid as
a result of not partially deducting IRAP in calculating taxa-
ble income for IRES purposes. This item decreased by €210
million over the previous year mainly due to the reimburse-
ment of nearly all (€229 million in principal and interest) of
the receivable for 2004-2010 and the updating at December
31, 2016 of the accrued portion of the residual receivable
following the reimbursement from the Revenue Agency.
The item “receivables from subsidiaries for assumption of
supplementary pension plan liabilities” in the amount of €154
million refers to receivables in respect of the assumption by
Group companies of their share of the supplementary pen-
sion plan. The terms of the agreement state that the Group
companies concerned are to reimburse the costs of extin-
guishing defined benefit obligations of the Parent Company,
which are recognized under “employee benefits”.
On the basis of actuarial forecasts made using current as-
sumptions, the portion due beyond five years of the “recei-
vables from subsidiaries for assumption of supplementary
pension plan liabilities” came to €90 million (€100 million at
December 31, 2015).
“Other long-term receivables” amounted to €0 million at
December 31, 2016, a decrease of €3 million due to the col-
lection of the receivable due from the subsidiary Enel Inge-
gneria e Ricerca SpA for the sale in 2011 of the interest held
in Sviluppo Nucleare Italia Srl.
341Financial statements of Enel SpA
17. Trade receivables - €255 million
The item breaks down as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Trade receivables:
- due from subsidiaries 229 276 (47)
- due from non-Group customers 26 7 19
Total 255 283 (28)
Trade receivables, which totaled €255 million, consist of
receivables due from subsidiaries (€229 million) and non-
Group customers (€26 million).
Trade receivables due from subsidiaries primarily regard the
management and coordination services and other activities
performed by Enel SpA on behalf of Group companies. The
decrease of €47 million over December 31, 2015 is linked
both with the new organizational structure of the Group,
which transferred part of communication activities from the
holding company to the Countries, and with developments
in the revenue associated with those services.
Trade receivables due from non-Group customers regard
services of various types. They totaled €26 million, an in-
crease of €19 million compared with December 31, 2015,
attributable to the exit of a number of companies from the
Group.
Trade receivables due from subsidiaries break down as fol-
lows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Subsidiaries
Enel Iberoamérica SL 2 1 1
Enel Produzione SpA 16 23 (7)
e-distribuzione SpA 34 44 (10)
Enel Green Power SpA 16 17 (1)
Enel Américas SA 4 3 1
Endesa SA - (1) 1
Enel Servizio Elettrico SpA 4 3 1
Enel Trade SpA 4 5 (1)
Enel Energia SpA 10 7 3
Enel Italia Srl 9 78 (69)
Enel.si Srl - 1 (1)
Enel Green Power North America Inc. 1 1 -
Enel Russia PJSC 17 18 (1)
Endesa Distribución Eléctrica SL 36 19 17
Endesa Generación SA 20 3 17
Endesa Energía SA 5 4 1
Enel Romania Srl 4 4 -
Enel Brasil SA 13 15 (2)
Enel Distribución Perú SAA 5 2 3
Enel Generación Perú SAA 5 2 3
Slovenské elektrárne AS - 16 (16)
Unión Eléctrica de Canarias Generación SAU 5 1 4
Other 19 10 9
Total 229 276 (47)
Annual Report 2016342
Trade receivables by geographical area are shown below.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Italy 96 181 (85)
EU 103 56 47
Non-EU Europe 6 22 (16)
Other 50 24 26
Total 255 283 (28)
18. Income tax receivables - €212 millionIncome tax receivables at December 31, 2016 amounted
to €212 million and essentially regard the Company’s IRES
credit for current 2016 taxes (€195 million) and the receiva-
ble with respect to consolidated IRES return for 2015 (€14
million).
19. Other current financial assets - €4,221 millionThis item can be broken down as follows.
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Other current financial assets included in net financial debt 19.1 3,912 3,052 860
Other sundry current financial assets 309 351 (42)
Total 4,221 3,403 818
19.1 Other current financial assets included in debt - €3,912 million
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Financial receivables due from Group companies:
- short-term financial receivables (intercompany current accounts) 31.1.1 2,849 2,912 (63)
- current portion of receivables for assumption of loans 31.1.1 45 46 (1)
Financial receivables due from others:
- current portion of long-term financial receivables 1 - 1
- other financial receivables 5 8 (3)
- cash collateral for margin agreements on OTC derivatives 31.1.1 1,012 86 926
Total 3,912 3,052 860
“Other current financial assets included in debt”, amounting
to €3,912 million at December 31, 2016, refer to “financial
receivables due from Group companies” (€2,894 million)
and “financial receivables due from others” (€1,018 million).
“Financial receivables due from Group companies” decrea-
sed by €64 million over December 31, 2015, due to the decli-
ne in short-term financial receivables due from Group compa-
nies on the intercompany current account (€63 million).
“Financial receivables due from others” increased by €924
million, essentially attributable to the increase in cash colla-
teral paid to counterparties for OTC derivatives on interest
rates and exchange rates.
343Financial statements of Enel SpA
20. Other current assets - €299 millionAt December 31, 2016, the item broke down as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Tax receivables 34 21 13
Other receivables due from Group companies 261 422 (161)
Receivables due from others 4 17 (13)
Total 299 460 (161)
“Other current assets” decreased by €161 million as compa-
red with December 31, 2015.
“Tax receivables” amounted to €34 million, primarily ac-
counted for by the VAT receivable for the Group (€27 mil-
lion) and other receivables with respect to prior-year income
taxes (€7 million). The increase of €13 million on the previous
year is essentially due to the larger VAT receivable for the
Group.
“Other receivables due from Group companies” comprise
IRES receivables in respect of the Group companies parti-
cipating in the consolidated taxation mechanism (€208 mil-
lion), and VAT receivables in respect of participating in the
Group VAT mechanism (€53 million). The decrease of €161
million on the previous year is essentially attributable to a
decline in intercompany IRES receivables connected with
the consolidated taxation mechanism (€104 million), and the
Group consolidated VAT mechanism (€57 million).
“Receivables due from others” amounted to €4 million at
December 31, 2016, a decrease of €13 million over the pre-
vious year, mainly reflecting the decline in the value of pre-
paid expenses (€9 million).
21. Cash and cash equivalents - €3,038 millionCash and cash equivalents are detailed in the following table.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Bank and post office deposits 3,038 5,925 (2,887)
Cash and cash equivalents on hand - - -
Total 3,038 5,925 (2,887)
Cash and cash equivalents amounted to €3,038 million, a
decrease of €2,887 million compared with December 31,
2015, mainly due to the impact of the redemption and re-
purchase of a number of bonds, the payment of dividends
during 2015 as approved by the Shareholders’ Meeting of
Enel SpA on May 26, 2016, as well as normal operations
connected with the central treasury function performed by
the Parent Company.
Liabilities
22. Shareholders’ equity - €26,916 millionShareholders’ equity amounted to €26,916 million, up €2,036
million compared with December 31, 2015. The increase is
attributable to net income for the year (€1,610 million), the
partial, non-proportional demerger of the subsidiary Enel Gre-
en Power to Enel SpA, which involved increases in share ca-
pital and the share premium reserve (€764 million and €2,204
million respectively), the distribution of the dividend for 2015
in the amount of €0.16 per share (for a total of €1,627 million),
as approved by the shareholders on May 26, 2016, and the in-
terim dividend for 2016 approved by the Board of Directors on
November 10, 2016 and paid as from January 25, 2017 (€0.09
per share, for a total of €915 million).
Annual Report 2016344
Share capital - €10,167 million
At December 31, 2016, the share capital of Enel SpA
amounted to €10,166,679,946 fully subscribed and paid
up, represented by 10,166,679,946 ordinary shares with
a par value of €1.00 each. The share capital of Enel SpA
has therefore increased by €763,322,151 compared with
the €9,403,357,795 registered at December 31, 2015, as a
result of the partial, non-proportional demerger of the subsi-
diary Enel Green Power SpA to Enel SpA, which took effect
as from March 31, 2016.
At the same date, based on the shareholders register and
the notices submitted to CONSOB and received by the
Company pursuant to Article 120 of Legislative Decree 58
of February 24, 1998, as well as other available information,
the only shareholders with interests of greater than 3% in
the Company’s share capital were the Ministry for the Eco-
nomy and Finance, which holds 23.585%, and BlackRock
Inc. (5.049% held as at November 30, 2016, through subsi-
diaries, for asset management purposes).
Other reserves - €11,410 million
Share premium reserve - €7,496 millionFollowing the partial, non-proportional demerger of Enel
Green Power SpA to Enel SpA, the share premium reser-
ve increased by €2,212 million. This was partially offset by
the recognition of transaction costs of €11 million and the
associated overall tax effect of €3 million. As a result, at De-
cember 31, 2016 the reserve amounted to €7,496 million.
Legal reserve - €2,034 millionThe legal reserve, following the allocation of net income for
2015 by the Shareholders’ Meeting of May 26, 2016, is equal
to 20.0% of share capital, as indicated in Article 2430, para-
graph 1, of the Italian Civil Code.
Reserve pursuant to Law 292/1993 - €2,215 millionThe reserve shows the remaining portion of the value
adjustments carried out when Enel was transformed from a
public entity to a joint-stock company.
In the case of a distribution of this reserve, the tax treatment
for capital reserves as defined by Article 47 of the Uniform
Income Tax Code shall apply.
Other sundry reserves - €68 millionOther sundry reserves include €19 million related to the re-
serve for capital grants, which reflects 50% of the grants
received from Italian public entities and EU bodies in applica-
tion of related laws for new works (pursuant to Article 55 of
Presidential Decree 917/1986), which is recognized in equity
in order to take advantage of tax deferment benefits. It also
includes €29 million in respect of the stock option reserve
and €20 million for other reserves.
Reserve from measurement of financial instruments - €(376) millionAt December 31, 2016, the item was entirely represented by
the reserve from measurement of cash flow hedge derivati-
ves with a negative value of €376 million (net of the positive
tax effect of €59 million).
Reserve from remeasurement of net em-ployee benefit plan liabilities/(assets) - €(27) millionAt December 31, 2016, the employee benefit plan reserve
amounted to €27 million (net of the positive tax effect of €6
million). The reserve includes all actuarial gains and losses
recognized directly in equity, as the corridor approach is no
longer permitted under the revised version of “IAS 19 - Em-
ployee benefits”.
The table below provides a breakdown of changes in the
reserve from measurement of financial instruments and the
reserve from measurement of defined benefit plan liabilities/
assets in 2015 and 2016.
345Financial statements of Enel SpA
Millions of euro
Gross gains/(losses)
recognized in equity for
the year
Gross released
to income statement Taxes
Gross gains/(losses)
recognized in equity for
the year
Gross released
to income statement Taxes
at Jan. 1, 2015
at Dec. 31, 2015
at Dec. 31, 2016
Reserve from measurement of cash flow hedge financial instruments (332) 441 (334) (52) (277) (479) 339 41 (376)
Reserve from remeasurement of net employee benefit plan liabilities/(assets) (10) (5) - (1) (16) (15) - 4 (27)
Gains/(Losses) recognized directly in equity (342) 436 (334) (53) (293) (494) 339 45 (403)
Retained earnings/(Loss carried forward) - €4,534 million
For 2016, the item shows a decrease of €769 million, attributa-
ble to the resolution of the Shareholders’ Meeting of May 26,
2016, which provided for the use of this reserve in the amount
of €813 million for the distribution of dividends to sharehol-
ders and the allocation to “retained earnings” of part of the
net income for 2015, equal to €44 million.
Net income - €805 million
Net income for 2016, net of the interim dividend for 2016
of €0.09 per share (for a total of €915 million), amounted to
€805 million. The table below shows the availability of sha-
reholders’ equity for distribution.
Millions of euro
at Dec. 31, 2016 Possible uses Amount available
Share capital 10,167
Capital reserves:
- share premium reserve 7,496 ABC 7,496
Income reserves:
- legal reserve 2,034 B
- reserve pursuant to Law 292/1993 2,215 ABC 2,215
- reserve from measurement of financial instruments (376)
- reserve for capital grants 19 ABC 19
- stock option reserve 29 ABC 29 (1) (2)
- reserve from remeasurement of employeebenefit plan liabilities (27)
- other 20 ABC 20
Retained earnings/(Loss carried forward) 4,534 ABC 4,534
Total 26,111 14,313
of which amount available for distribution 14,310
A: for capital increases.B: to cover losses.C: for distribution to shareholders.(1) Regards lapsed options.(2) Not distributable in the amount of €3 million regarding options granted by the Parent Company to employees of subsidiaries that have lapsed.
There are no restrictions on the distribution of the reserves
pursuant to Article 2426, paragraph 1(5) of the Italian Civil
Code since there are no unamortized start-up and expan-
sion costs or research and development costs, or departu-
Annual Report 2016346
res pursuant to Article 2423, paragraph 4, of the Italian Civil
Code.
Note that in the three previous years, the available reserve de-
nominated “retained earnings/(loss carried forward)“ has been
used in the amount of €1,659 million for the distribution of divi-
dends to shareholders.
Enel’s goals in capital management are focused on the cre-
ation of value for shareholders, safeguarding the interests of
stakeholders and ensuring business continuity, as well as on
maintaining sufficient capitalization to ensure cost-effective
access to outside sources of financing, so as to adequately
support growth in the Group’s business.
22.1 Dividends
The table below shows the dividends paid by the Company in 2015 and 2016.
Amount distributed (in millions of euro) Net dividend per share (in euro)
Dividends paid in 2015
Dividends for 2014 1,316 0.14
Interim dividend for 2015 - -
Special dividends - -
Total dividends paid in 2015 1,316 0.14
Dividends paid in 2016
Dividends for 2015 1,627 0.16
Interim dividend for 2016 (1) - -
Special dividends - -
Total dividends paid in 2016 1,627 0.16
(1) Approved by the Board of Directors on November 10, 2016 and paid as from January 25, 2017 (interim dividend per share of €0.09 for a total of €915 million).
The dividend for 2016, equal to €0.18 per share, amounting
to a total of €1,830 million (of which €0.09 per share, for a
total of €915 million, already paid as an interim dividend as
from January 25, 2017), was proposed at the Shareholders’
Meeting called for May 4, 2017, at a single call. These finan-
cial statements do not reflect the effects of the distribution
of this dividend for 2016 to shareholders, with the exception
of liabilities due to shareholders for the 2016 interim divi-
dend approved by the Board of Directors on November 10,
2016 and paid as from January 25, 2017.
22.2 Capital management
The Company’s objectives for managing capital comprise
safeguarding the business as a going concern, creating va-
lue for stakeholders and supporting the development of the
Group. In particular, the Group seeks to maintain an adequa-
te capitalization that enables it to achieve a satisfactory re-
turn for shareholders and ensure access to external sources
of financing, in part by maintaining an adequate rating.
In this context, the Company manages its capital structure
and adjusts that structure when changes in economic con-
ditions so require. There were no substantive changes in
objectives, policies or processes in 2016.
To this end, the Company constantly monitors developments
in the level of its debt in relation to equity. The situation at
December 31, 2016 and 2015 is summarized in the following
table.
347Financial statements of Enel SpA
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Non-current financial position (13,664) (14,503) 839
Net current financial position (207) 1,001 (1,208)
Non-current financial receivables and long-term securities 32 77 (45)
Net financial debt (13,839) (13,425) (414)
Shareholders’ equity 26,916 24,880 2,036
Debt/equity ratio (0.51) (0.54) 0.03
23. Borrowings - €13,664 million, €973 million, €6,184 million
Millions of euro Non-current Current
at Dec. 31, 2016 at Dec. 31, 2015 at Dec. 31, 2016 at Dec. 31, 2015
Long-term borrowings 13,664 14,503 973 3,062
Short-term borrowings - - 6,184 4,914
For more details about the nature, recognition and classification of borrowings, please see note 31 “Financial instruments“.
24. Employee benefits - €286 millionThe Company provides its employees with a variety of be-
nefits, including termination benefits, additional months’
pay, indemnities in lieu of notice, loyalty bonuses for achie-
vement of seniority milestones, supplementary pension
plans, supplementary healthcare plans, additional indemni-
ty for FOPEN pension contributions, FOPEN pension con-
tributions in excess of deductible amount and personnel
incentive plans.
The item includes accruals made to cover post-employment
benefits under defined benefit plans and other long-term
benefits to which employees are entitled under statute,
contract or other form of employee incentive scheme.
These obligations, in accordance with IAS 19, were deter-
mined using the projected unit credit method.
The following table reports the change during the year in
the defined benefit obligation, as well as a reconciliation of
the defined benefit obligation with the obligation recognized
in the balance sheet at December 31, 2016 and December
31, 2015.
Annual Report 2016348
Millions of euro 2016 2015
Pension benefits
Electricity discount
Health insurance
Other benefits Total
Pension benefits
Electricity discount
Health insurance
Other benefits Total
CHANGES IN ACTUARIAL OBLIGATION
Actuarial obligation at January 1 230 - 37 24 291 242 11 35 14 302
Current service cost - - 1 14 15 6 - - 11 17
Interest expense 5 - 1 - 6 5 - 1 - 6
Actuarial (gains)/losses arising from changes in demographic assumptions 1 - (1) - - - - - - -
Actuarial (gains)/losses arising from changes in financial assumptions 10 - 3 - 13 - - - - -
Experience adjustments 1 - 1 - 2 6 - - - 6
Past service cost - - - - - (1) - - - (1)
(Gains)/Losses arising from settlements - - - - - - (10) - - (10)
Other payments (26) - (3) (15) (44) (33) (1) (2) (4) (40)
Other changes 1 - 1 1 3 5 - 3 3 11
Actuarial obligation at December 31 222 - 40 24 286 230 - 37 24 291
Millions of euro
2016 2015
(Gains)/Losses charged to profit or loss
Service cost 15 16
Interest expense 6 6
(Gains)/Losses arising from settlements - (10)
Total 21 12
Millions of euro
2016 2015
Remeasurement (gains)/losses in OCI
Actuarial (gains)/losses on defined benefit plans 15 6
Other changes - -
Total 15 6
The current service cost for employee benefits in 2016
amounted to €15 million, recognized under personnel costs (€17
million in 2015), while the interest cost from the accretion of the
liability amounted to €6 million (as in 2015).
The main actuarial assumptions used to calculate the liabilities
arising from employee benefits, which are consistent with tho-
se used the previous year, are set out below.
2016 2015
Discount rate 0.30%-1.40% 0.50%-2.15%
Rate of wage increases 1.40%-3.40% 1.6%-3.60%
Rate of increase in healthcare costs 2.40% 2.60%
349Financial statements of Enel SpA
The following table reports the outcome of a sensitivity
analysis that demonstrates the effects on the liability for
healthcare plans as a result of changes reasonably possible
at the end of the year in the actuarial assumptions used in
estimating the obligation.
Millions of euro
An increase of 0.5% in discount
rate
A decrease of 0.5% in discount
rate
An increase of 0.5% in inflation
rate
An increase of 0.5% in
remuneration
An increase of 0.5% in pensions
currently being paid
An increase of 1% in healthcare
costs
An increase of 1 year in life
expectancy of active and retired
employees
Healthcare plans: ASEM (2) 3 3 3 3 6 2
25. Provisions for risks and charges - €68 million The “provisions for risks and charges” cover potential liabi-
lities that could arise from legal proceedings and other di-
sputes, without considering the effects of rulings that are
expected to be in the Company’s favor and those for which
any charge cannot be quantified with reasonable certainty.
In determining the balance of the provision, we have taken
account of both the charges that are expected to result from
court judgments and other dispute settlements for the year
and an update of the estimates for positions arising in pre-
vious years not related to the transferred business units.
The following table shows changes in provisions for risks and charges.
Taken to income statement
Millions of euro Accruals Reversals Utilization Total
at Dec. 31, 2015 at Dec. 31, 2016
of which current portion
Provision for litigation, risks and other charges:
- litigation 15 2 (5) - 12 7
- other 6 25 - (3) 28 25
Total 21 27 (5) (3) 40 32
Provision for early retirement incentives 32 - (1) (3) 28 3
TOTAL 53 27 (6) (6) 68 35
The decrease in the litigation provision amounted to €3
million, essentially reflecting the revision of estimates for
a number of outstanding disputes.
The provision covers disputes in Italy and essentially re-
gards labor litigation (€9 million) and litigation concerning
tender contracts (€2 million).
The increase of €22 million in other provisions is attribu-
table the provision for other risks and the payments made
through the use of the “compensation” provision, esta-
blished on December 31, 2015, following the elimination
of the electricity discount benefit for retired personnel
with effect from January 1, 2016 after the termination of
the agreement on rate discounts for retired personnel and
their survivors.
The decrease in the provision for early retirement incen-
tives (€4 million) is essentially attributable to payments
in 2016 of voluntary terminations under Article 4 of the
Fornero Act.
Annual Report 2016350
26. Other non-current liabilities - €36 million“Other non-current liabilities” amounted to €36 million (€243
million at December 31, 2015). They essentially regard the
debt towards Group companies that initially arose following
Enel SpA’s application (submitted in its capacity as the con-
solidating company) for reimbursement for 2004-2011 of the
additional income taxes paid as a result of not deducting part
of IRAP in computing taxable income for IRES purposes. The
liability in respect of the subsidiaries is balanced by the re-
cognition of non-current tax receivables (note 16). The de-
crease of €207 million is largely attributable to the payment
to the consolidated companies of nearly all (€227 million) of
the reimbursement of the receivable for 2004-2010 received
from the Revenue Agency in 2016 (€229 million including
Enel SpA’s share of €2 million). The amount of the liability
at December 31, 2016 reflects the updating of the interest
accrued on the residual receivable.
27. Trade payables - €150 million
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Trade payables:
- due to third parties 83 105 (22)
- due to Group companies 67 59 8
Total 150 164 (14)
“Trade payables” mainly include payables for the supply of
services and other activities performed in 2016, and compri-
se payables due to third parties of €83 million (€105 million
at December 31, 2015) and payables due to Group compa-
nies of €67 million (€59 million at December 31, 2015).
Trade payables due to subsidiaries at December 31, 2016
break down as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Subsidiaries
Enel Produzione SpA 1 1 -
Enel Ingegneria e Ricerca SpA 1 1 -
Enel Servizio Elettrico SpA 1 1 -
Enel Trade SpA 1 1 -
Enel Italia Srl 41 36 5
Enel Iberoamérica SL 10 8 2
Enel.Factor SpA 1 2 (1)
Endesa SA 2 1 1
Enel Russia PJSC 3 4 (1)
Sviluppo Nucleare Italia Srl - - -
Other 6 4 2
Total 67 59 8
351Financial statements of Enel SpA
Trade payables break down by geographical area as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Suppliers
Italy 119 132 (13)
EU 20 18 2
Non-EU Europe 7 10 (3)
Other 4 4 -
Total 150 164 (14)
28. Other current financial liabilities - €550 million“Other current financial liabilities” mainly regard interest expense accrued on debt outstanding at end-year.
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Deferred financial liabilities 31.2.1 501 584 (83)
Other items 31.2.1 49 59 (10)
Total 550 643 (93)
More specifically, “deferred financial liabilities” consist of
interest expense accrued on financial debt, while “other
items” essentially include amounts due are to Group com-
panies that accrued as of December 31, 2016 but are to
be settled in the following year, comprising both financial
expense on hedge derivatives on commodity exchange ra-
tes and interest expense on intercompany current accounts.
29. Net financial position and long-term financial receivables and securities - €13,839 million
The following table shows the net financial position and long-term financial receivables and securities on the basis of the
items on the balance sheet.
Millions of euro
Notes at Dec. 31, 2016 at Dec. 31, 2015 Change
Long-term borrowings 23 13,664 14,503 (839)
Short-term borrowings 23 6,184 4,914 1,270
Current portion of long-term borrowings 23 973 3,062 (2,089)
Non-current financial assets included in debt 15.1 32 77 (45)
Current financial assets included in debt 19.1 3,912 3,052 860
Cash and cash equivalents 21 3,038 5,925 (2,887)
Total 13,839 13,425 414
Pursuant to the CONSOB instructions of July 28, 2006, the
following table reports the net financial position at Decem-
ber 31, 2016, reconciled with net financial debt as reported
in the report on operations.
Annual Report 2016352
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
of which with related parties
of which with related parties
Bank and post office deposits 3,038 5,925 (2,887)
Liquidity 3,038 5,925 (2,887)
Current financial receivables 3,912 2,894 3,052 2,958 860
Short-term bank debt (809) (2) (807)
Short-term portion of long-term bank debt (973) (3,062) 2,089
Other short-term financial payables (5,375) (4,268) (4,912) (3,243) (463)
Short-term financial debt (7,157) (7,976) 819
Net short-term financial position (207) 1,001 (1,208)
Bonds (12,414) (14,503) 2,089
Long-term borrowings (13,664) (14,503) 839
Long-term financial position (13,664) (14,503) 839
NET FINANCIAL POSITION as per CONSOB instructions (13,871) (13,502) (369)
Long-term financial receivables 32 27 77 72 (45)
NET FINANCIAL DEBT (13,839) (13,425) (414)
30. Other current liabilities - €1,694 million”Other current liabilities” mainly concern payables due to
the tax authorities and to the Group companies participating
in the consolidated IRES taxation mechanism, and in the
Group VAT system, as well as the liability due to sharehol-
ders for the interim dividend for 2016 approved on Novem-
ber 10, 2016 and paid as from January 25, 2017.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Tax payables 184 650 (466)
Payables due to Group companies 544 354 190
Payables due to employees, recreational/assistance associations 30 24 6
Payables due to social security institutions 12 11 1
Payables due to customers for security deposits and reimbursements 1 1 -
Other 923 6 917
Total 1,694 1,046 648
“Tax payables” amounted to €184 million and essentially re-
gard amounts due to tax authorities for consolidated IRES
(€177 million). The decrease as compared with the previous
year amounted to €466 million, essentially due to the decre-
ase in the debtor position with tax authorities for consolida-
ted IRES.
“Payables due to Group companies” amounted to €544 mil-
lion. They consist of €457 million in payables in respect of
the IRES liability under the consolidated taxation mechanism
(€233 million at December 31, 2015) and €86 million in re-
spect of Group VAT (€121 million at December 31, 2015). The
increase of €190 million essentially reflects developments in
the debtor positions noted above.
The item “other”, equal to €923 million, includes €915 million
for the liability due to shareholders for the interim dividend
to be paid as from January 25, 2017 (€0.09 per share).
353Financial statements of Enel SpA
31. Financial instruments
31.1 Financial assets by category
The following table shows the carrying amount for each ca-
tegory of financial assets provided by IAS 39, broken down
into current and non-current financial assets, showing sepa-
rately hedging derivatives and derivatives measured at fair
value through profit or loss.
Millions of euro Non-current Current
Notes at Dec. 31, 2016 at Dec. 31, 2015 at Dec. 31, 2016 at Dec. 31, 2015
Loans and receivables 31.1.1 53 107 7,514 9,611
Financial assets available for sale 31.1.2 1 1 - -
Financial assets at fair value through profit or loss
Derivative financial assets at FVTPL 33 1,691 1,668 480 299
Total 1,691 1,668 480 299
Derivative financial assets designated as hedging instruments
Cash flow hedge derivatives 33 751 888 - -
Fair value hedge derivatives 33 27 35 - -
Total 778 923 - -
TOTAL 2,523 2,699 7,994 9,910
For more details on the recognition and classification of current and non-current derivative financial assets, please see note
33 “Derivatives and hedge accounting”.
31.1.1 Loans and receivables The following table shows loans and receivables by nature, broken down into current and non-current financial assets.
Millions of euro Non-current Current
Notesat Dec. 31,
2016at Dec. 31,
2015 Notesat Dec. 31,
2016at Dec. 31,
2015
Cash and cash equivalents - - 21 3,038 5,925
Trade receivables - - 17 255 283
Financial receivables due from Group companies
Receivables for assumption of share of financial debt 15.1 27 72 - -
Receivables on intercompany current accounts - - 19.1 2,849 2,912
Current portion of receivables for assumption of loans 19.1 - - 45 46
Other financial receivables - - 154 173
Total 27 72 3,048 3,131
Financial receivables due from others
Current portion of long-term financial receivables - - 1 -
Cash collateral for margin agreements on OTC derivatives - - 19.1 1,012 86
Other financial receivables 26 35 160 186
Total 26 35 1,173 272
TOTAL 53 107 7,514 9,611
The primary changes compared with 2015 related to:
> a decrease in “cash and cash equivalents” of €2,887 mil-
lion, essentially attributable to the redemption and repur-
chase of a number of bonds and to the normal central
treasury functions performed by Enel SpA;
> a decrease in “financial receivables due from Group
companies” totaling €128 million, largely reflecting the
decrease in receivables on the intercompany current ac-
Annual Report 2016354
count held with Group companies (€63 million) and in the
amount of the receivable for assuming financial debt as a
result of the repayment of principal (€45 million);
> an increase of “financial receivables due from others”
totaling €892 million, mainly as a result of an increase in
cash collateral paid to counterparties for OTC derivatives
transactions on interest rates and exchange rates (€926
million).
31.1.2 Financial assets available for sale Financial assets available for sale amounted to €1 million
and are represented by the equity investment held by Enel
SpA in Emittenti Titoli SpA. The investment is classified as
an “equity investment in other entities” and is carried at
cost. The value is unchanged with respect to 2015.
31.2 Financial liabilities by category
The following table shows the carrying amount for each ca-
tegory of financial liabilities provided by IAS 39, broken down
into current and non-current financial liabilities, showing se-
parately hedging derivatives and derivatives measured at fair
value through profit or loss.
Millions of euro Non-current Current
Notes at Dec. 31, 2016 at Dec. 31, 2015 at Dec. 31, 2016 at Dec. 31, 2015
Financial liabilities measured at amortized cost 31.2.1 13,664 14,503 7,857 8,783
Financial liabilities at fair value through profit or loss
Derivative financial liabilities at FVTPL 33 1,703 1,687 556 367
Total 1,703 1,687 556 367
Derivative financial liabilities designated as hedging instruments
Cash flow hedge derivatives 33 1,379 1,030 - -
Total 1,379 1,030 - -
TOTAL 16,746 17,220 8,413 9,150
For more details on the recognition and classification of cur-
rent and non-current derivative financial liabilities, please
see note 33 “Derivatives and hedge accounting”.
For more details about fair value measurement, please see
note 34 “Fair value measurement”.
31.2.1 Financial liabilities measured at amortized costThe following table shows financial liabilities at amortized cost by nature, broken down into current and non-current financial
liabilities.
Millions of euro Non-current Current
Notes at Dec. 31, 2016 at Dec. 31, 2015 Notes at Dec. 31, 2016 at Dec. 31, 2015
Long-term borrowings 23 13,664 14,503 973 3,062
Short-term borrowings - - 23 6,184 4,914
Trade payables - - 27 150 164
Other current financial liabilities - - 28 550 643
Total 13,664 14,503 7,857 8,783
355Financial statements of Enel SpA
Borrowings
Long-term borrowings (including the portion falling due within 12 months) - €14,637 million Long-term borrowings, which refer to bonds, bank bor-
rowings and loans from Group companies, denominated
in euros and other currencies, including the portion falling
due within 12 months (equal to €973 million), amounted to
€14,637 million at December 31, 2016.
The following table shows the nominal values, carrying
amounts and fair values of long-term borrowings at De-
cember 31, 2016, including the portion falling due within 12
months, grouped by type of borrowing and type of interest
rate. For listed debt instruments, the fair value is given by
official prices. For unlisted debt instruments, the fair value is
determined using valuation techniques appropriate for each
category of financial instrument and the associated market
data at the reporting date, including the credit spreads of
the Group.
Millions of euroNominal
valueCarrying amount
Current portion
Portion due in
more than 12 months
Fairvalue
Nominal value
Carrying amount
Current portion
Portion due in
more than 12 months
Fairvalue
Carrying amount
at Dec. 31, 2016 at Dec. 31, 2015 Change
Bonds:
- fixed rate 11,584 11,502 908 10,594 13,117 14,693 14,586 1,999 12,587 17,001 (3,084)
- floating rate 1,888 1,885 65 1,820 1,858 2,986 2,979 1,063 1,916 2,931 (1,094)
Total 13,472 13,387 973 12,414 14,975 17,679 17,565 3,062 14,503 19,932 (4,178)
Bank borrowings:
- fixed rate - - - - - - - - - - -
- floating rate 50 50 - 50 50 - - - - - 50
Total 50 50 - 50 50 - - - - - 50
Loans from Group companies:
- fixed rate 1,200 1,200 - 1,200 1,575 - - - - - 1,200
- floating rate - - - - - - - - - - -
Total 1,200 1,200 - 1,200 1,575 - - - - - 1,200
Total fixed-rate borrowings 12,784 12,702 908 11,794 14,692 14,693 14,586 1,999 12,587 17,001 (1,884)
Total floating-rate borrowings 1,938 1,935 65 1,870 1,908 2,986 2,979 1,063 1,916 2,931 (1,044)
TOTAL 14,722 14,637 973 13,664 16,600 17,679 17,565 3,062 14,503 19,932 (2,928)
The balance for bonds is reported net of €842 million in re-
spect of the unlisted floating-rate “Special series of bonds
reserved for employees 1994-2019”, which Enel SpA holds
in its portfolio.
For more details about the maturity analysis of borrowings,
please see note 32 “Risk management”, while for more de-
tails about fair value measurement inputs, please see note
34 “Fair value measurement”.
The table below shows long-term borrowings by currency
and interest rate.
Annual Report 2016356
Long-term borrowings by currency and interest rate
Millions of euro Carrying amount Nominal valueCurrent average
nominal interest rateCurrent effective
interest rate
at Dec. 31, 2015 at Dec. 31, 2016 at Dec. 31, 2016
Euro 13,691 11,113 11,153 4.9% 5.2%
US dollar 1,130 1,168 1,186 8.8% 9.2%
Pound sterling 2,744 2,356 2,383 6.5% 6.7%
Total non-euro currencies 3,874 3,524 3,569
TOTAL 17,565 14,637 14,722
The table below reports changes in the nominal value of long-term debt.
Millions of euroNominal
value RepaymentsNew
borrowing OtherOwn bonds
repurchasedExchange
differences Nominal value
at Dec. 31, 2015 at Dec. 31, 2016
Bonds 17,679 (3,064) - - (784) (359) 13,472
Bank borrowings - - 50 - - - 50
Loans from Group companies - - - 1,200 - - 1,200
Total 17,679 (3,064) 50 1,200 (784) (359) 14,722
Compared with December 31, 2015, the nominal value of
long-term debt decreased by €2,957 million, reflecting:
> the redemption of bonds in the year totaling €3,064 mil-
lion. More specifically, redemptions regarded €3,000 mil-
lion in respect of two bonds, of which a fixed-rate €2,000
million note and a floating rate €1,000 million note, issued
in 2010 as part of a pan-European offer of bonds for retail
investors that matured on February 26, 2016, as well as
€64 million in respect of four tranches of INA and ANIA
bonds;
> the repurchase of own bonds in the amount of €784 mil-
lion. More specifically, the repurchase involved:
- €750 million in respect of a non-binding voluntary offer
initiated on January 14, 2016 and closed on January 20,
2016 concerning the cash repurchase of bonds issued
by Enel with a view to optimizing the Company’s liabili-
ty structure through the active management of maturi-
ties and the cost of funds;
- €34 million in respect of unlisted floating-rate bonds of
the “Special series of bonds reserved for employees
1994-2019”;
> the recognition of exchange gains of €359 million;
> new bank borrowings of €50 million;
> the assignment of €1,200 million, as part of the partial,
non-proportional demerger of Enel Green Power SpA to
Enel SpA, of a liability represented by a long-term fixed-
rate loan falling due on July 31, 2023, initially in respect
of the subsidiary Enel Green Power International BV and
then, after the demerger from Enel Green Power Interna-
tional BV, of assets and liabilities to Enel Finance Interna-
tional NV, in respect of the latter.
The table below reports the characteristics of the bank bor-
rowing obtained in 2016.
New borrowings
Type of loan Counterparty Issue date
Amount financed (millions of euro) Currency
Interest rate (%)
Type of interest rate Due date
Bank borrowings UniCredit SpA 20/07/2016 50 Euro 0.1% Floating rate 15/07/2020
Total 50
357Financial statements of Enel SpA
In 2016, a loan was obtained from UniCredit SpA in the ma-
ximum amount of €500 million, to be drawn in three tran-
ches up to March 15, 2017, with a final due date of July 15,
2020 and drawn at December 31, 2016 in the amount of
€50 million.
The main long-term borrowings of Enel SpA are governed
by covenants that are commonly adopted in international
business practice. These borrowings are represented by the
bond issues carried out within the framework of the Glo-
bal Medium-Term Notes program, issues of subordinated
unconvertible hybrid bonds, the €9.4 billion Forward Start
Facility Agreement agreed on February 8, 2013 by Enel SpA
and Enel Finance International NV with a pool of banks and
the loans granted by UniCredit SpA.
The main covenants in respect of the bond issues in the
Global Medium-Term Notes program of Enel SpA and Enel
Finance International NV can be summarized as follows:
> negative pledge clauses under which the issuer and the
guarantor may not establish or maintain (except under
statutory requirement) mortgages, liens or other encum-
brances on all or part of its assets or revenue, to secure
certain financial borrowings, unless the same restrictions
are extended equally or pro rata to the bonds in question;
> pari passu clauses, under which bonds and the associa-
ted guarantees constitute a direct, unconditional and un-
secured obligation of the issuer and the guarantor, do not
grant preferential rights among them and have at least
the same seniority as other present and future unsubor-
dinated and unsecured bonds of the issuer and the gua-
rantor;
> cross-default clauses, under which the occurrence of a
default event in respect of a specified financial liability
(above a threshold level) of the issuer, the guarantor or
significant subsidiaries constitutes a default in respect of
the liabilities in question, which may become immedia-
tely repayable.
The main covenants covering the hybrid bonds can be sum-
marized as follows:
> subordination clauses: each hybrid bond is subordinate to
all other bonds of the issuer and has the same seniority
as other hybrid financial instruments issued and greater
seniority than equity instruments;
> prohibition on mergers with other companies, the sale
or leasing of all or a substantial part of the company’s
assets to another company, unless the latter succeeds in
all obligations of the issuer.
The main covenants for the Forward Start Facility Agree-
ment and the loan agreements between Enel SpA and Uni-
Credit SpA are substantially similar and can be summarized
as follows:
> negative pledge clauses, under which the borrower and,
in some cases, significant subsidiaries may not establish
mortgages, liens or other encumbrances on all or part of
their respective assets to secure certain financial liabili-
ties, with the exception of expressly permitted encum-
brances;
> disposals clauses, under which the borrower and, in
some cases, the subsidiaries of Enel may not dispose
of their assets or a significant portion of their assets or
operations, with the exception of expressly permitted di-
sposals;
> pari passu clauses, under which the payment underta-
kings of the borrower have the same seniority as its other
unsecured and unsubordinated payment obligations;
> change of control clauses, which are triggered in the
event: (i) control of Enel is acquired by one or more par-
ties other than the Italian State or (ii) Enel or any of its
subsidiaries transfer a substantial portion of the Group’s
assets to parties outside the Group such that the finan-
cial reliability of the Group is significantly compromised.
The occurrence of one of the two circumstances may
give rise to (a) the renegotiation of the terms and condi-
tions of the financing or (b) compulsory early repayment
of the financing by the borrower;
> cross-default clauses, under which the occurrence of a
default event in respect of a specified financial liability
(above a threshold level) of the borrower or significant
subsidiaries constitutes a default in respect of the liabi-
lities in question, which may become immediately repa-
yable.
In addition, following the partial, non-proportional demerger
of Enel Green Power SpA (“EGP”) to Enel SpA, as from
the final moment of March 31, 2016, certain balance-sheet
items and legal relationships of EGP were assigned to Enel
SpA. The legal relationships included guarantees issued by
EGP on behalf of Enel Green Power International BV and
its subsidiaries in respect of commitments assumed in loan
transactions. Those guarantees and the associated loan
contracts include certain covenants and “events of default”,
some borne by Enel SpA as the guarantor, typical of interna-
tional business practice.
All the financial borrowings considered specify “events of
default” typical of international business practice, such as,
Annual Report 2016358
for example, insolvency, bankruptcy proceedings or if the
entity ceases trading.
None of the covenants indicated above has been triggered
to date.
Debt structure after hedging
The following table shows the effect of the hedges of foreign currency risk on the gross long-term debt structure (including
portions maturing in the next 12 months).
Millions of euro at Dec. 31, 2016 at Dec. 31, 2015
Initial debt structure
Impact of hedging
instruments
Debt structure
after hedging Initial debt structure
Impact of hedging
instruments
Debt structure
after hedging
Carrying amount
Notional amount %
Carrying amount
Notional amount %
Euro 11,113 11,153 75.8% 3,569 14,722 13,691 13,751 77.8% 3,928 17,679
US dollar 1,168 1,186 8.0% (1,186) - 1,130 1,148 6.5% (1,148) -
Pound sterling 2,356 2,383 16.2% (2,383) - 2,744 2,780 15.7% (2,780) -
Total 14,637 14,722 100.0% - 14,722 17,565 17,679 100.0% - 17,679
The following table shows the effect of the hedges of interest rate risk on the gross long-term debt outstanding at the re-
porting date.
Outstanding gross debt at Dec. 31, 2016 at Dec. 31, 2015
Before hedging After hedging Before hedging After hedging
Floating rate 13.2% 17.7% 16.9% 20.6%
Fixed rate 86.8% 82.3% 83.1% 79.4%
Total 100.0% 100.0% 100.0% 100.0%
Short-term borrowings - €6,184 millionThe following table shows short-term borrowings at December 31, 2016, by nature.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Borrowings from non-Group counterparties
Bank borrowings 808 - 808
Short-term bank borrowings (ordinary current account) 1 2 (1)
Cash collateral for CSAs on OTC derivatives received 1,107 1,669 (562)
Total 1,916 1,671 245
Borrowings from Group counterparties
Short-term borrowings from Group companies (on intercompany current accounts) 4,268 3,243 1,025
Other short-term borrowings from Group companies - - -
Total 4,268 3,243 1,025
TOTAL 6,184 4,914 1,270
Short-term borrowings amounted to €6,184 million, up
€1,270 million over the previous year (€4,914 million in
2015), mainly due to:
> the €808 million increase in liabilities to banks for short-
term loans received;
> the €562 million decrease in cash collateral received from
counterparties for transactions in OTC derivatives on inte-
rest rates and exchange rates;
359Financial statements of Enel SpA
> the €1,025 million increase in “short-term borrowings
from Group companies” attributable to the deterioration
in the debtor position on the intercompany current ac-
count held with subsidiaries.
It should be specified that the fair value of current bor-
rowings equals their carrying amount as the impact of di-
scounting is not significant.
31.2.2 Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss, broken
down into non-current (€1,703 million) and current (€556
million) financial liabilities, refer solely to derivative financial
liabilities.
31.2.3 Net gains and lossesThe following table shows net gains and losses by category of financial instruments, excluding derivatives.
Millions of euro Net gains/(losses)of which: impairment/reversal of
impairment
at Dec. 31, 2016 at Dec. 31, 2015 at Dec. 31, 2016
Available-for-sale financial assets 6 1 -
Loans and receivables - 5 1
Financial liabilities measured at amortized cost (510) (1,229) -
For more details on net gains and losses on derivatives, please see note 7 “Net financial income/(expense) from derivatives“.
32. Risk management
32.1 Financial risk management objectives and policies
As part of its operations, the Company is exposed to a varie-
ty of financial risks, notably market risks (including interest
rate risk and exchange risk), credit risk and liquidity risk.
Enel’s governance arrangements for financial risk envisage:
> specific internal committees, formed of members of the
Group’s top management and chaired by the CEO, which
are responsible for strategic policy-making and oversight
of risk management;
> the establishment of specific policies set at both the
Group level and at the level of individual Regions/Countri-
es/global business lines, which define the roles and re-
sponsibilities for those involved in managing, monitoring
and controlling risks, ensuring the organizational separa-
tion of units involved in managing the Group’s business
and those responsible for managing risk;
> the specification of operational limits at both the Group le-
vel and at the level of individual Regions/Countries/global
business lines for the various types of risk. These limits
are monitored periodically by the risk management units.
32.2 Market risks
Market risk is the risk that the value of financial and non-
financial assets or liabilities and the associated expected
cash flows could change owing to changes in market prices.
As part of its operations as an industrial holding company,
Enel SpA is exposed to different market risks, notably the
risk of changes in interest rates and exchange rates.
Interest rate risk and exchange risk are primarily generated
by the presence of financial instruments.
The main financial liabilities held by the Company include
bonds, bank borrowings (including revolving credit facilities
and loans from EU bodies), other borrowings, derivatives,
cash collateral for derivatives transactions and trade paya-
bles. The main purpose of those financial instruments is to
finance the operations of the Company.
The main financial assets held by the Company include finan-
cial receivables, derivatives, cash collateral for derivatives tran-
sactions, cash and short-term deposits and trade receivables.
Annual Report 2016360
For more details, please see note 31 “Financial instruments”.
The source of exposure to interest rate risk and exchange
risk did not change with respect to the previous year.
As the Parent Company, Enel SpA centralizes some treasury
management functions and access to financial markets with
regard to financial derivatives contracts on interest rates and
exchange rates. As part of this activity, Enel SpA acts as an
intermediary for Group companies with the market, taking
positions that, while they can be substantial, do not however
represent an exposure to markets risks for Enel SpA.
During 2016, no overshoots of the threshold values set by
regulators for the activation of clearing obligations (EMIR -
European Market Infrastructure Regulation 648/2012 of the
European Parliament) were detected.
The volume of transactions in financial derivatives outstan-
ding at December 31, 2016 is reported below, with specifi-
cation of the notional amount of each class of instrument as
calculated at the year-end exchange rates provided by the
European Central Bank, where denominated in currencies
other than the euro.
The notional amount of a derivative contract is the amount on
which cash flows are exchanged. This amount can be expres-
sed as a value or a quantity (for example tons, converted into
euro by multiplying the notional amount by the agreed price).
The notional amounts of derivatives reported here do not
represent amounts exchanged between the parties and
therefore are not a measure of the Company’s credit risk
exposure.
Interest rate riskInterest rate risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of chan-
ges in market interest rates.
Interest rate risk for the Company manifests itself as a change
in the flows associated with interest payments on floating-
rate financial liabilities, a change in financial terms and con-
ditions in negotiating new debt instruments or as an adverse
change in the value of financial assets/liabilities measured at
fair value, which are typically fixed-rate debt instruments.
Interest rate risk is managed with the dual goals of reducing
the amount of debt exposed to interest rate fluctuations and
containing the cost of funds, limiting the volatility of results.
This goal is pursued through the strategic diversification of
the portfolio of financial liabilities by contract type, maturity
and interest rate, and modifying the risk profile of specific ex-
posures using OTC derivatives, mainly interest rate swaps.
The notional amount of outstanding contracts is reported
below.
Millions of euro Notional amount
at Dec. 31, 2016 at Dec. 31, 2015
Interest rate derivatives
Interest rate swaps 22,377 21,163
Total 22,377 21,163
The term of such contracts does not exceed the maturity
of the underlying financial liability, so that any change in the
fair value and/or cash flows of such contracts is offset by a
corresponding change in the fair value and/or cash flows of
the underlying position.
Interest rate swaps normally provide for the periodic
exchange of floating-rate interest flows for fixed-rate inte-
rest flows, both of which are calculated on the basis of the
notional principal amount.
The notional amount of open interest rate swaps at the end
of the year was €22,377 million (€21,163 million at Decem-
ber 31, 2015), of which €1,329 million (unchanged on De-
cember 31, 2015) in respect of hedges of the Company’s
share of debt, and €10,524 million (€9,917 million at Decem-
ber 31, 2015) in respect of hedges of the debt of Group
companies with the market intermediated in the same no-
tional amount with those companies.
For more details on interest rate derivatives, please see
note 33 “Derivatives and hedge accounting”.
The amount of floating-rate debt that is not hedged against
interest rate risk is the main risk factor that could impact the
income statement (raising borrowing costs) in the event of
an increase in market interest rates.
At December 31, 2016, 13.2% of gross long-term financial
debt was floating rate (16.9% at December 31, 2015). Ta-
361Financial statements of Enel SpA
king account of hedges of interest rates considered effec-
tive pursuant to IAS 39, 82.3% of gross long-term financial
debt was hedged at December 31, 2016 (79.4% at Decem-
ber 31, 2015). Including derivatives treated as hedges for
management purposes but ineligible for hedge accounting,
the ratio is essentially unchanged.
Interest rate risk sensitivity analysis The Company analyses the sensitivity of its exposure by
estimating the effects of a change in interest rates on the
portfolio of financial instruments.
More specifically, sensitivity analysis measures the poten-
tial impact of market scenarios on equity, for the cash flow
hedge component, and on profit or loss, for the fair value
hedge component, for derivatives that are not eligible for
hedge accounting and for the portion of gross long-term
debt not hedged using derivative financial instruments.
These scenarios are represented by parallel increases and
decreases in the yield curve as at the reporting date.
There were no changes in the methods and assumptions
used in the sensitivity analysis compared with the previous
year.
With all other variables held constant, the Company’s profit
before tax would be affected as follows.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015
Pre-tax impact on profit or loss
Pre-tax impacton equity
Pre-tax impact on profit or loss
Pre-tax impacton equity
Basis points Increase Decrease Increase Decrease Increase Decrease Increase Decrease
Change in financial expense on gross long-term floating-rate debt after hedging 25 7 (7) - - 9 (9) - -
Change in fair value of derivatives classified as non-hedging instruments 25 7 (7) - - 7 (7) - -
Change in fair value of derivatives designated as hedging instruments
Cash flow hedges 25 - - 13 (13) - - 13 (13)
Fair value hedges 25 (5) 5 - - (7) 7 - -
Exchange riskExchange risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of
changes in exchange rates.
For Enel SpA, the main source of exchange risk is the pre-
sence of monetary financial instruments denominated in a
currency other than the euro, mainly bonds denominated
in foreign currency.
The exposure to exchange risk did not change with respect
to the previous year.
For more details, please see note 31 “Financial instruments”.
In order to minimize exposure to changes in exchange ra-
tes, the Company normally uses a variety of OTC derivati-
ves such as currency forwards and cross currency interest
rate swaps. The term of such contracts does not exceed the
maturity of the underlying exposure.
Currency forwards are contracts in which the counterpar-
ties agree to exchange principal amounts denominated in
different currencies at a specified future date and exchan-
ge rate (the strike). Such contracts may call for the actual
exchange of the two amounts (deliverable forwards) or
payment of the difference between the strike exchange
rate and the prevailing exchange rate at maturity (non-deli-
verable forwards). In the latter case, the strike rate and/or
the spot rate may be determined as averages of the official
fixings of the European Central Bank.
Cross currency interest rate swaps are used to transform a
long-term fixed- or floating-rate liability in foreign currency
into an equivalent floating- or fixed-rate liability in euros. In
addition to having notionals denominated in different cur-
rencies, these instruments differ from interest rate swaps
in that they provide both for the periodic exchange of cash
flows and the final exchange of principal.
Annual Report 2016362
The following table reports the notional amount of transactions outstanding at December 31, 2016 and December 31, 2015,
broken down by type of hedged item.
Millions of euro Notional amount
at Dec. 31, 2016 at Dec. 31, 2015
Foreign exchange derivatives
Currency forwards: 5,399 11,388
- hedging exchange risk on commodities 4,507 7,239
- hedging future cash flows 196 4,138
- other currency forwards 696 11
Cross currency interest rate swaps 22,668 23,730
Total 28,067 35,118
More specifically, these include:
> currency forward contracts with a total notional amount
of €4,507 million (€7,239 million at December 31, 2015),
of which €2,253 million to hedge the exchange risk asso-
ciated with purchases of energy commodities by Group
companies, with matching transactions with the market;
> currency forward contracts with a notional amount of
€196 million (€4,138 million at December 31, 2015), to
hedge the exchange risk associated with other expected
cash flows in currencies other than the euro, of which
€98 million in market transactions;
> currency forward contracts with a notional amount of
€696 million (€11 million at December 31, 2015), to hed-
ge the exchange rate risk on investment spending, of
which €348 million in market transactions;
> cross currency interest rate swaps with a notional
amount of €22,668 million (€23,730 million at December
31, 2015), to hedge the exchange risk on the debt of Enel
SpA or other Group companies denominated in curren-
cies other than the euro.
For more details, please see note 33 “Derivatives and hed-
ge accounting”.
An analysis of the Group’s debt shows that 24.2% of gross
medium and long-term debt (22.2% at December 31, 2015)
is denominated in currencies other than the euro.
Considering exchange rate hedges and the portion of debt
in foreign currency that is denominated in the currency of
account or the functional currency of the company, the debt
is fully hedged using cross currency interest rate swaps.
Exchange risk sensitivity analysis The Company analyses the sensitivity of its exposure by
estimating the effects of a change in exchange rates on the
portfolio of financial instruments.
More specifically, sensitivity analysis measures the poten-
tial impact of market scenarios on equity, for the cash flow
hedge component, and on profit or loss, for the fair value
hedge component, for derivatives that are not eligible for
hedge accounting and for the portion of gross long-term
debt not hedged using derivative financial instruments.
These scenarios are represented by the appreciation/de-
preciation of the euro against all of the foreign currencies
compared with the value observed as at the reporting date.
There were no changes in the methods and assumptions
used in the sensitivity analysis compared with the previous
year.
With all other variables held constant, the profit before tax
would be affected as follows.
363Financial statements of Enel SpA
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015
Pre-tax impact on profit or loss
Pre-tax impacton equity
Pre-tax impact on profit or loss
Pre-tax impacton equity
Exchange rate
Appreciation of euro
Depreciation of euro
Appreciation of euro
Depreciation of euro
Appreciation of euro
Depreciation of euro
Appreciation of euro
Depreciation of euro
Change in fair value of derivatives designated as hedging instruments
Cash flow hedges 10% - - (462) 564 - - (507) 620
Fair value hedges 10% - - - - - - - -
32.3 Credit risk
Credit risk is represented by the possibility that a change
in the creditworthiness of a counterparty in a financial tran-
saction could impact the creditor position, in terms of insol-
vency (default risk) or changes in its market value (spread
risk) such as to give rise to a loss. The Company is exposed
to credit risk from its financial activities, including transac-
tions in derivatives, deposits with banks and financial insti-
tutions, foreign exchange transactions and other financial
instruments.
The sources of exposure to credit risk did not change with
respect to the previous year.
The Company’s management of credit risk is based on the
selection of counterparties from among leading Italian and
international financial institutions with high credit standing
considered solvent both by the market and on the basis
of internal assessments, diversifying the exposure among
them. Credit exposures and associated credit risk are regu-
larly monitored by the departments responsible for monito-
ring risks under the policies and procedures outlined in the
governance rules for managing the Group’s risks, which are
also designed to ensure prompt identification of possible mi-
tigation actions to be taken.
Within this general framework, Enel entered into margin
agreements with the leading financial institutions with which
it operates that call for the exchange of cash collateral, which
significantly mitigates the exposure to counterparty risk.
At December 31, 2016, the exposure to credit risk, repre-
sented by the carrying amount of financial assets net of re-
lated provisions for impairment as well as derivatives with a
positive fair value, net of any cash collateral held, amounted
to €9,388 million (€10,909 million at December 31, 2015).
Of the total, €4,277 million regard receivables in respect of
Group companies and €3,038 million regard cash and cash
equivalents.
Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
of which Group of which Group
Non-current financial receivables 27 27 72 72 (45)
Other non-current financial assets 5 - 5 - -
Trade receivables 255 229 283 276 (28)
Current financial receivables 2,894 2,894 2,958 2,958 (64)
Other current financial assets 1,327 154 445 173 882
Financial derivatives 1,842 973 1,221 343 621
Cash and cash equivalents 3,038 - 5,925 - (2,887)
Total 9,388 4,277 10,909 3,822 (1,521)
32.4 Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting obligations associated with financial lia-
bilities that are settled by delivering cash or another financial
asset.
Annual Report 2016364
The objectives of liquidity risk management policies are:
> ensuring an appropriate level of liquidity for the Group,
minimizing the associated opportunity cost;
> maintaining a balanced debt structure in terms of the ma-
turity profile and funding sources.
In the short term, liquidity risk is mitigated by maintaining an
appropriate level of unconditionally available resources, in-
cluding cash and short-term deposits, available committed
credit lines and a portfolio of highly liquid assets.
In the long term, liquidity risk is mitigated by maintaining
a balanced debt maturity profile and diversifying funding
sources in terms of instruments, markets/currencies and
counterparties.
At December 31, 2016 Enel SpA had a total of about €3,038
million in cash and cash equivalents (€5,925 million at De-
cember 31, 2015), and committed lines of credit amounting
to €6,170 million (of which none had been drawn) maturing
in more than one year (€5,720 million at December 31,
2015).
Maturity analysis The table below summarizes the maturity profile of the
Company’s financial liabilities based on contractual undi-
scounted payments.
Millions of euro Maturing in
Less than 3 months
Between 3 months and 1 year
Between 1 and 2 years
Between 2 and 5 years Over 5 years
Bonds:
- fixed rate - 908 3,073 3,922 3,599
- floating rate - 65 563 385 872
Total - 973 3,636 4,307 4,471
Bank borrowings:
- fixed rate - - - - -
- floating rate - - - 50 -
Total - - - 50 -
Loans from Group companies:
- fixed rate - - - - 1,200
- floating rate - - - - -
Total - - - - 1,200
TOTAL - 973 3,636 4,357 5,671
365Financial statements of Enel SpA
32.5 Offsetting financial assets and financial liabilities
The following table reports the net financial assets and lia-
bilities. More specifically, it shows that there are no netting
arrangements for derivatives in the financial statements
since the Company does not plan to set-off assets and lia-
bilities. As envisaged by current market regulations and to
guarantee transactions involving derivatives, Enel SpA has
entered into margin agreements with leading financial insti-
tutions that call for the exchange of cash collateral, broken
down as shown in the table.
Millions of euro at Dec. 31, 2016
(a) (b) (c)=(a)-(b) (d) (e)=(c)-(d)
Related amounts not set off in the balance sheet
(d)(i),(d)(ii) (d)(iii)
Gross amounts of recognized
financial assets/(liabilities)
Gross amounts of recognized
financial assets/(liabilities) set off
in the balance sheet
Net amounts of financial assets/
(liabilities) presented in the
balance sheetFinancial
instruments
Net portion of financial assets/
(liabilities) guaranteed with
cash collateral
Net amount of financial assets/
(liabilities)
FINANCIAL ASSETS
Derivative financial assets:
- on interest rate risk 554 - 554 - (59) 495
- on exchange risk 2,395 - 2,395 - (1,834) 561
Total derivative financial assets 2,949 - 2,949 - (1,893) 1,056
TOTAL FINANCIAL ASSETS 2,949 - 2,949 - (1,893) 1,056
FINANCIAL LIABILITIES
Derivative financial liabilities:
- on interest rate risk (757) - (757) - 597 (160)
- on exchange risk (2,881) - (2,881) - 1,201 (1,680)
Total derivative financial liabilities (3,638) - (3,638) - 1,798 (1,840)
TOTAL FINANCIAL LIABILITIES (3,638) - (3,638) - 1,798 (1,840)
TOTAL NET FINANCIAL ASSETS/(LIABILITIES) (689) - (689) - (95) (784)
Annual Report 2016366
33. Derivatives and hedge accountingThe following tables report the notional amount and fair va-
lue of derivative financial assets and liabilities by type of hed-
ge relationship and hedged risk, broken down into current
and non-current derivative financial assets and liabilities.
The notional amount of a derivative contract is the amount
on the basis of which cash flows are exchanged. This amount
can be expressed as a value or a quantity (for example tons,
converted into euros by multiplying the notional amount by
the agreed price). Amounts denominated in currencies other
than the euro are converted at the end-year exchange rates
provided by the European Central Bank.
Millions of euro Non-current Current
Notional amount Fair value Notional amount Fair value
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015 Change
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015 Change
Derivatives designated as hedging instruments
Cash flow hedges:
- on exchange risk 2,517 3,928 751 888 (137) - - - - -
Total cash flow hedges 2,517 3,928 751 888 (137) - - - - -
Fair value hedges:
- on interest rate risk 800 800 27 35 (8) - - - - -
Total fair value hedges 800 800 27 35 (8) - - - - -
Derivatives at FVTPL:
- on interest rate risk 10,497 9,822 527 413 114 27 96 1 2 (1)
- on exchange risk 7,860 9,474 1,164 1,255 (91) 3,718 5,342 479 297 182
Total derivatives at FVTPL 18,357 19,296 1,691 1,668 23 3,745 5,438 480 299 181
TOTAL DERIVATIVE FINANCIAL ASSETS 21,674 24,024 2,469 2,591 (122) 3,745 5,438 480 299 181
Millions of euro Non-current Current
Notional amount Fair value Notional amount Fair value
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015 Change
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015 Change
Derivatives designated as hedging instruments
Cash flow hedges:
- on interest rate risk 390 390 154 143 11 - - - - -
- on exchange risk 2,394 1,556 1,225 887 338 - - - - -
Total cash flow hedges 2,784 1,946 1,379 1,030 349 - - - - -
Derivatives at FVTPL:
- on interest rate risk 10,535 9,860 530 419 111 127 195 74 67 7
- on exchange risk 7,860 9,475 1,173 1,268 (95) 3,718 5,343 482 300 182
Total derivatives at FVTPL 18,395 19,335 1,703 1,687 16 3,845 5,538 556 367 189
TOTAL DERIVATIVE FINANCIAL LIABILITIES 21,179 21,281 3,082 2,717 365 3,845 5,538 556 367 189
367Financial statements of Enel SpA
33.1 Hedge accounting
Derivatives are initially recognized at fair value, on the trade
date of the contract and are subsequently re-measured at
their fair value.
The method of recognizing the resulting gain or loss de-
pends on whether the derivative is designated as a hed-
ging instrument, and if so, on the nature of the item being
hedged.
Hedge accounting is applied to derivatives entered into in
order to reduce risks such as interest rate risk, exchange
risk, commodity risk, credit risk and equity risk when all the
criteria provided for under IAS 39 are met.
At the inception of the transaction, the Company docu-
ments the relationship between hedging instruments and
hedged items, as well as its risk management objectives
and strategy. The Company also analyzes, both at hedge
inception and on an ongoing systematic basis, the effec-
tiveness of hedges using prospective and retrospective
tests in order to determine whether hedging instruments
are highly effective in offsetting changes in the fair values
or cash flows of hedged items.
Depending on the nature of the risks to which it is exposed,
the Company designates derivatives as hedging instru-
ments in one of the following hedge relationships:
> cash flow hedge derivatives in respect of the risk of: i)
changes in the cash flows associated with long-term
floating-rate debt; ii) changes in the exchange rates as-
sociated with long-term debt denominated in a currency
other than the currency of account or the functional cur-
rency in which the company holding the financial liability
operates; iii) changes in the price of fuels and non-ener-
gy commodities denominated in a foreign currency;
> fair value hedge derivatives involving the hedging of ex-
posures to changes in the fair value of an asset, a liability
or a firm commitment attributable to a specific risk;
> derivatives hedging a net investment in a foreign ope-
ration (NIFO), involving the hedging of exposures to
exchange rate volatility associated with investments in
foreign entities.
For more details on the nature and the extent of risks ari-
sing from financial instruments to which the Company is
exposed, please see note 32 “Risk management”.
Cash flow hedgesCash flow hedges are used in order to hedge the Com-
pany’s exposure to changes in future cash flows that are
attributable to a particular risk associated with an asset,
a liability or a highly probable transaction that could affect
profit or loss.
The effective portion of changes in the fair value of deriva-
tives that are designated and qualify as cash flow hedges
is recognized in other comprehensive income. The gain or
loss relating to the ineffective portion is recognized imme-
diately in the income statement.
Amounts accumulated in equity are reclassified to profit or
loss in the period when the hedged item affects profit or
loss.
When a hedging instrument expires or is sold, or when a
hedge no longer meets the criteria for hedge accounting
but the hedged item has not expired or been cancelled,
any cumulative gain or loss existing in equity at that time
remains in equity and is recognized when the forecast tran-
saction is ultimately recognized in the income statement.
When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in equity is
immediately transferred to profit or loss.
The Company currently uses these hedge relationships to
minimize the volatility of profit or loss.
Fair value hedgesFair value hedges are used to protect the Company against
exposures to adverse changes in the fair value of assets,
liabilities or firm commitments attributable to a particular
risk that could affect profit or loss.
Changes in the fair value of derivatives that qualify and are
designated as hedging instruments are recognized in the
income statement, together with changes in the fair value
of the hedged item that are attributable to the hedged risk.
If the hedge is ineffective or no longer meets the criteria for
hedge accounting, the adjustment to the carrying amount
of a hedged item for which the effective interest method
is used is amortized to profit or loss over the period to ma-
turity.
The Company currently makes use of such hedge rela-
tionships to seize opportunities associated with general
developments in the yield curve.
Annual Report 2016368
Hedge of a net investment in a foreign operation (NIFO)Hedges of net investments in foreign operations, with a fun-
ctional currency other than the euro, are hedges of the impact
of changes in exchange rates in respect of investments in
foreign entities. The hedge instrument is a liability denomi-
nated in the same currency as the investment. The foreign
exchange differences of the hedged item and the hedge are
accumulated each year in equity until the disposal of the in-
vestment, at which time the foreign exchange differences are
transferred to profit or loss.
The Company does not currently hold any hedges of net in-
vestments in a foreign operation.
For more information on the fair value measurement of deriva-
tives, please see note 34 “Fair value measurement”.
Hedge relationships by type of risk hedged
33.1.1 Interest rate riskThe following table shows the notional amount and the fair
value of the hedging instruments on the interest rate risk of
transactions outstanding as at December 31, 2016 and De-
cember 31, 2015, broken down by type of hedged item.
Millions of euroFair
valueNotionalamount
Fair value
Notionalamount
Hedging instrument Hedged item at Dec. 31, 2016 at Dec. 31, 2015
Interest rate swapsFloating-rate borrowings (154) 390 (143) 390
Interest rate swapsFixed-rate
borrowings 27 800 35 800
Total (127) 1,190 (108) 1,190
The interest rate swaps outstanding at the end of the year
and designated as hedging instruments function as a cash
flow hedge and fair value hedge for the hedged item. More
specifically, fair value hedge derivatives relate to the issue
of an unconvertible hybrid bond denominated in euros in
2013, hedged in the amount of €800 million, while the cash
flow hedge derivatives refer to the hedging of certain floa-
ting-rate bonds issued since 2001.
The following table shows the notional amount and the fair value
of hedging derivatives on interest rate risk as at December 31,
2016 and December 31, 2015, broken down by type of hedge.
Millions of euro Notional amount Fair value assets Notional amount Fair value liabilities
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
Cash flow hedge derivatives: - - - - 390 390 (154) (143)
- interest rate swaps - - - - 390 390 (154) (143)
Fair value hedge derivatives: 800 800 27 35 - - - -
- interest rate swaps 800 800 27 35 - - - -
Total interest rate derivatives 800 800 27 35 390 390 (154) (143)
The notional amount of the interest rate swaps at December
31, 2016 came to €1,190 million (€1,190 million at December
31, 2015) with a corresponding negative fair value of €127
million (negative €108 million at December 31, 2015).
The deterioration in the fair value of derivatives compared
with the previous year is mainly attributable to the general
decline in the yield curve over the course of 2016.
369Financial statements of Enel SpA
Cash flow hedge derivatives The following table shows the cash flows expected in coming years from cash flow hedge derivatives.
Millions of euro Fair value Distribution of expected cash flows
Cash flow hedge derivativeson interest rates
at Dec. 31, 2016 2017 2018 2019 2020 2021 Beyond
Positive fair value - - - - - - -
Negative fair value (154) (15) (14) (14) (14) (13) (97)
The following table shows the impact of cash flow hedge derivatives on interest rate risk on equity during the period, gross
of tax effects.
Millions of euro
2016 2015
Opening balance at January 1 (87) (93)
Changes in fair value recognized in equity (OCI) - -
Changes in fair value recognized in profit or loss - recycling (23) 6
Changes in fair value recognized in profit or loss - ineffective portion - -
Closing balance at December 31 (110) (87)
Fair value hedge derivatives The following table shows the cash flows expected in coming years from fair value hedge derivatives.
Millions of euro Fair value Distribution of expected cash flows
Fair value hedge derivatives at Dec. 31, 2016 2017 2018 2019 2020 2021 Beyond
Positive fair value 27 14 14 32 - - -
Negative fair value - - - - - - -
33.1.2 Exchange riskThe following table shows the notional amount and the fair
value of the hedging instruments on exchange risk of tran-
sactions outstanding as at December 31, 2016 and Decem-
ber 31, 2015, broken down by type of hedged item.
Millions of euro Fair value Notional amount Fair value Notional amount
Hedging instrument Hedged item at Dec. 31, 2016 at Dec. 31, 2015
Cross currency interest rate swaps (CCIRSs) Fixed-rate borrowings (474) 4,911 1 5,484
Total (474) 4,911 1 5,484
The cross currency interest rate swaps outstanding at the
end of the year and designated as hedging instruments
function as a cash flow hedge for the hedged item. More
specifically, these derivatives hedge fixed-rate bonds deno-
minated in foreign currencies.
The following table shows the notional amount and the fair va-
lue of derivatives on exchange risk as at December 31, 2016
and December 31, 2015, broken down by type of hedge.
Millions of euro Notional amount Fair value assets Notional amount Fair value liabilities
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
Cash flow hedge derivatives: 2,517 3,928 751 888 2,394 1,556 (1,225) (887)
- forwards - - - - - - - -
- options - - - - - - - -
- cross currency interestrate swaps 2,517 3,928 751 888 2,394 1,556 (1,225) (887)
Total foreign exchange derivatives 2,517 3,928 751 888 2,394 1,556 (1,225) (887)
Annual Report 2016370
The notional amount of the cross currency interest rate
swaps at December 31, 2016 came to €4,911 million
(€5,484 million at December 31, 2015), with a correspon-
ding negative fair value of €474 million (positive €1 million at
December 31, 2015).
In 2016 no hedges of exchange risk expired and no new
hedges were established. Accordingly, the change in the
value of the notional amount and the associated fair value
of derivatives mainly reflects the appreciation of the euro
against the pound sterling and the depreciation of the euro
against the US dollar.
Cash flow hedge derivatives The following table shows the cash flows expected in co-
ming years from cash flow hedge derivatives on exchange
risk.
Millions of euro Fair value Distribution of expected cash flows
Cash flow hedge derivatives on exchange rates
at Dec. 31, 2016 2017 2018 2019 2020 2021 Beyond
Positive fair value 751 99 98 100 62 61 685
Negative fair value (1,225) (71) (70) (222) (36) (55) (683)
The following table shows the impact of cash flow hedge derivatives on exchange risk on equity during the period, gross of
tax effects.
Millions of euro
2016 2015
Opening balance at January 1 (208) (310)
Changes in fair value recognized in equity (OCI) - -
Changes in fair value recognized in profit or loss - recycling (118) 102
Changes in fair value recognized in profit or loss - ineffective portion - -
Closing balance at December 31 (326) (208)
33.2 Derivatives at fair value through profit or loss
The following table shows the notional amount and the fair value of derivatives at FVTPL as at December 31, 2016 and De-
cember 31, 2015.
Millions of euro Notional amount Fair value assets Notional amount Fair value liabilities
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
at Dec. 31, 2016
at Dec. 31, 2015
Derivatives at FVTPL on interest rates: 10,524 9,918 527 415 10,663 10,055 (604) (486)
- interest rate swaps 10,524 9,918 527 415 10,663 10,055 (604) (486)
Derivatives at FVTPL on exchange rates: 11,577 14,817 1,644 1,552 11,577 14,817 (1,656) (1,568)
- forwards 2,699 5,694 158 308 2,699 5,694 (158) (311)
- cross currency interest rate swaps 8,878 9,123 1,486 1,244 8,878 9,123 (1,498) (1,257)
Total derivatives at FVTPL 22,101 24,735 2,171 1,967 22,240 24,872 (2,260) (2,054)
At December 31, 2016, the notional amount of derivatives at
fair value through profit or loss on interest rates and foreign
exchange rates came to €44,341 million (€49,607 million at
December 31, 2015) corresponding to a negative fair value
of €88 million (negative €87 million at December 31, 2015).
The decrease compared with the previous year in the notio-
371Financial statements of Enel SpA
nal amount of derivatives at fair value through profit or loss
reflects €6,480 million from a decline in forex operations,
slightly offset by an increase of €1,214 million in the notional
amount of interest rate swaps.
Interest rate swaps at the end of the year refer primarily to
hedges of the debt of the Group companies with the market
and intermediated in the same notional amount with those
companies in the amount of €10,524 million.
The overall increase in the notional amount of interest rate
swaps (€1,214 million) compared with the previous year is
attributable to new transactions closed as part of the pre-
hedge strategy for future bond issues in 2019-2020 desig-
ned to set the cost of future funding in advance. Compared
with December 31, 2015, the overall change in the fair value
(a negative €6 million) is largely connected with the general
decline in the yield curve over the course of the year.
Forward contracts, with a notional amount of €2,699 mil-
lion (€5,694 million at December 31, 2015), relate mainly to
OTC derivatives entered into to mitigate the exchange risk
associated with the prices of energy commodities within
the provisioning process of Group companies and matched
with market transactions. They also hedge the expected
cash flows in currencies other than the currency of account
connected with the acquisition of non-energy commodities
and investment goods in the sectors of renewable energy
and infrastructure and networks (new generation digital
meters).
The change in the notional amount and the fair value as
compared with the previous year is associated with normal
operations.
Cross currency interest rate swaps, with a notional amount
of €8,878 million (€9,123 million at December 31, 2016), re-
late to hedges of exchange risk on the debt of the Group
companies denominated in currencies other than the euro
and matched with market transactions.
The change in the notional amount and the fair value of the
cross currency interest rate swaps is mainly due to deve-
lopments in the exchange rate of the euro with other major
currencies.
34. Fair value measurementThe Company measures fair value in accordance with IFRS
13 whenever required by international accounting stan-
dards.
Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability. The best estimate
is the market price, i.e. its current price, publicly available
and effectively traded on an active, liquid market.
The fair value of assets and liabilities is categorized into
a fair value hierarchy that provides three levels defined as
follows on the basis of the inputs to valuation techniques
used to measure fair value:
> Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities to which the Company has
access at the measurement date;
> Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived
from prices);
> Level 3: inputs for the asset or liability that are not based
on observable market data (that is, unobservable inputs).
In this note, the relevant disclosures are provided in order
to assess the following:
> for assets and liabilities that are measured at fair value on
a recurring or non-recurring basis in the balance sheet af-
ter initial recognition, the valuation techniques and inputs
used to develop those measurements; and
> for recurring fair value measurements using significant
unobservable inputs (Level 3), the effect of the measure-
ments on profit or loss or other comprehensive income
for the period.
For this purpose:
> recurring fair value measurements are those that IFRSs
require or permit in the balance sheet at the end of each
reporting period;
> non-recurring fair value measurements are those that
IFRSs require or permit in the balance sheet in particular
circumstances.
The fair value of derivative contracts is determined using
the official prices for instruments traded on regulated mar-
kets. The fair value of instruments not listed on a regulated
market is determined using valuation methods appropriate
for each type of financial instrument and market data as of
the close of the period (such as interest rates, exchange
rates, volatility), discounting expected future cash flows on
the basis of the market yield curve and translating amounts
in currencies other than the euro using exchange rates pro-
vided by the European Central Bank. For contracts invol-
Annual Report 2016372
ving commodities, the measurement is conducted using
prices, where available, for the same instruments on both
regulated and unregulated markets.
In accordance with the new international accounting stan-
dards, in 2013 the Group included a measurement of credit
risk, both of the counterparty (Credit Valuation Adjustment
or CVA) and its own (Debit Valuation Adjustment or DVA),
in order to adjust the fair value of financial instruments for
the corresponding amount of counterparty risk.
More specifically, the Group measures CVA/DVA using a
Potential Future Exposure valuation technique for the net
exposure of the position and subsequently allocating the
adjustment to the individual financial instruments that
make up the overall portfolio. All of the inputs used in this
technique are observable on the market. Changes in the
assumptions underlying the estimated inputs could have
an effect on the fair value reported for such instruments.
The notional amount of a derivative contract is the amount
on which cash flows are exchanged. This amount can be
expressed as a value or a quantity (for example tons, con-
verted into euros by multiplying the notional amount by the
agreed price).
Amounts denominated in currencies other than the euro
are converted into euros at the exchange rate provided by
the European Central Bank.
The notional amounts of derivatives reported here do not
necessarily represent amounts exchanged between the
parties and therefore are not a measure of the Company’s
credit risk exposure.
For listed debt instruments, the fair value is given by official
prices. For unlisted instruments the fair value is determined
using appropriate valuation techniques for each category of
financial instrument and market data at the closing date of
the year, including the credit spreads of Enel SpA.
34.1 Assets measured at fair value in the balance sheet
The following table shows, for each class of assets measu-
red at fair value on a recurring or non-recurring basis in the
balance sheet, the fair value measurement at the end of the
reporting period and the level in the fair value hierarchy into
which the fair value measurements are categorized.
Millions of euro Non-current assets Current assets
Notes
Fair value at Dec. 31,
2016 Level 1 Level 2 Level 3
Fair value at Dec. 31,
2016 Level 1 Level 2 Level 3
Derivatives
Cash flow hedge derivatives:
- on exchange risk 33 751 - 751 - - - - -
Total 751 - 751 - - - - -
Fair value hedge derivatives:
- on interest rate risk 33 27 - 27 - - - - -
Total 27 - 27 - - - - -
Fair value through profit or loss:
- on interest rate risk 33 527 - 527 - 1 - 1 -
- on exchange risk 33 1,164 - 1,164 - 479 - 479 -
- on commodity risk - - - - - - - -
Total 1,691 - 1,691 - 480 - 480 -
TOTAL 2,469 - 2,469 - 480 - 480 -
34.2 Liabilities measured at fair value in the balance sheet
The following table reports, for each class of liabilities me-
asured at fair value on a recurring or non-recurring basis
in the balance sheet, the fair value measurement at the
end of the reporting period and the level in the fair value
hierarchy into which the fair value measurements are ca-
tegorized.
373Financial statements of Enel SpA
Millions of euro Non-current liabilities Current liabilities
Notes
Fair value at Dec. 31,
2016 Level 1 Level 2 Level 3
Fair value at Dec. 31,
2016 Level 1 Level 2 Level 3
Derivatives
Cash flow hedge derivatives:
- on interest rate risk 33 154 - 154 - - - - -
- on exchange risk 33 1,225 - 1,225 - - - - -
Total 1,379 - 1,379 - - - - -
Fair value through profit or loss:
- on interest rate risk 33 530 - 530 - 74 - 74 -
- on exchange risk 33 1,173 - 1,173 - 482 - 482 -
Total 1,703 - 1,703 - 556 - 556 -
TOTAL 3,082 - 3,082 - 556 - 556 -
34.3 Liabilities not measured at fair value in the balance sheet
The following table shows, for each class of liabilities not
measured at fair value in the balance sheet but for which the
fair value shall be disclosed, the fair value at the end of the
reporting period and the level in the fair value hierarchy into
which the fair value measurements are categorized.
Millions of euro Liabilities
NotesFair value at
Dec. 31, 2016 Level 1 Level 2 Level 3
Bonds:
- fixed rate 31.2.1 13,117 13,117 - -
- floating rate 31.2.1 1,858 587 1,271 -
Total 14,975 13,704 1,271 -
Bank borrowings:
- fixed rate - - - -
- floating rate 31.2.1 50 - 50 -
Total 50 - 50 -
Loans from Group companies:
- fixed rate 31.2.1 1,575 - 1,575 -
- floating rate - - - -
Total 1,575 - 1,575 -
TOTAL 16,600 13,704 2,896 -
Annual Report 2016374
35. Related partiesRelated parties have been identified on the basis of the pro-
visions of international accounting standards and the appli-
cable CONSOB measures.
The transactions Enel SpA entered into with its subsidiaries
mainly involved the provision of services, the sourcing and
employment of financial resources, insurance coverage,
human resource management and organization, legal and
corporate services, and the planning and coordination of tax
and administrative activities.
All the transactions are part of routine operations, are carri-
ed out in the interest of the Company and are settled on an
arm’s length basis, i.e. on the same market terms as agree-
ments entered into between two independent parties.
Finally, the Enel Group’s corporate governance rules, which
are discussed in greater detail in the Report on Corporate
Governance and Ownership Structure available on the Com-
pany’s website (www.enel.com), establish conditions for en-
suring that transactions with related parties are performed in
accordance with procedural and substantive propriety.
In November 2010, the Board of Directors of Enel SpA ap-
proved a procedure governing the approval and execution
of transactions with related parties carried out by Enel SpA
directly or through subsidiaries. The procedure (available at
https://www.enel.com/en/investors/a201608-transactions-
with-related-parties.html) sets out rules designed to ensure
the transparency and procedural and substantive propriety
of transactions with related parties. It was adopted in im-
plementation of the provisions of Article 2391-bis of the
Italian Civil Code and the implementing regulations issued
by CONSOB. In 2016, no transactions were carried out for
which it was necessary to make the disclosures required in
the rules on transactions with related parties adopted with
CONSOB Resolution 17221 of March 12, 2010, as amended
with Resolution 17389 of June 23, 2010.
The following tables summarize commercial, financial and
other relationships between the Company and related parties.
375Financial statements of Enel SpA
Commercial and other relationships
2016Costs Revenue
Millions of euro Receivables Payables Goods Services Goods Services
at Dec. 31, 2016 at Dec. 31, 2016 2016 2016
Subsidiaries
Central Geradora Termelétrica Fortaleza SA 1 - - - - 1
Enel Generación Perú SAA 5 - - - - 3
Enel Distribución Perú SAA 6 - - - - 3
Enel Generación Piura SA 1 - - - - 1
Enel Brasil SA 13 - - - - 7
Endesa Distribución Eléctrica SL 36 1 - - - 18
Endesa Generación SA 20 1 - 1 - 17
Enel Latinoamérica SA - 1 - 1 - -
Endesa SA - 2 - 1 - 1
e-distributie Banat SA 3 - - - - 2
e-distributie Dobrogea SA 2 - - - - 1
e-distributie Muntenia SA 6 - - - - 3
e-distribuzione SpA 132 263 - - - 53
Enel Energia SpA 120 37 - - - 16
Enel Iberoamérica SL 2 10 - 10 - 1
Enel Green Power SpA 16 15 - - - 20
Enel Green Power North America Inc. 1 1 - - - -
Enel Ingegneria e Ricerca SpA - 12 - - - -
Enel Russia PJSC 17 3 - 1 - 5
Enel Produzione SpA 67 186 - - - 24
Enel Romania Srl 5 - - - - 1
Enel Italia Srl 61 55 - 64 - 10
Enel Servizio Elettrico SpA 51 20 - - - 4
Enel Sole Srl 4 5 - - - 1
Enel Trade SpA 57 2 - - - 3
Enel.Factor SpA 1 2 - - - -
Enel.si Srl - 1 - - - -
Endesa Energía SA 5 - - - - 1
Enel Américas SA 4 - - - - 1
Gas y Electricidad Generación SAU 3 - - - - 2
RusEnergoSbyt LLC 1 - - - - -
Slovenské elektrárne AS 17 - - - - 1
Unión Eléctrica de Canarias Generación SAU 5 - - - - 4
3Sun Srl - 28 - - - -
Total 662 645 - 78 - 204
Other related parties
GSE 1 - - - - -
Fondazione Centro Studi Enel - - - - - 1
Total 1 - - - - 1
TOTAL 663 645 - 78 - 205
Annual Report 2016376
2015Costs Revenue
Millions of euro Receivables Payables Goods Services Goods Services
at Dec. 31, 2015
at Dec. 31, 2015 2015 2015
Subsidiaries
Central Geradora Termelétrica Fortaleza SA 1 - - - - 1
Edegel SA 2 - - - - 2
Empresa de Distribución Eléctrica de Lima Norte SAA 3 - - - - 2
Enel Brasil SA 15 - - - - 15
Endesa Distribución Eléctrica SL 19 1 - 1 - 8
Endesa Generación SA 3 - - - - 5
Enel Latinoamérica SA - - - 1 - -
Endesa SA - 1 - 3 - -
Enel Distributie Banat SA 1 - - - - 1
Enel Distributie Dobrogea SA 1 - - - - 1
Enel Distributie Muntenia SA 3 - - - - 2
Enel Distribuzione SpA 361 167 - - - 45
Enel Energia SpA 102 26 - - - 7
Enel Iberoamérica SL 1 8 - 9 - 1
Enel France Sas 2 1 - - - -
Enel Green Power SpA 17 115 - - - 16
Enel Green Power North America Inc. 1 1 - - - -
Enel Ingegneria e Ricerca SpA 2 6 - - - 1
Enel Russia PJSC 18 4 - - - 7
Enel Produzione SpA 132 153 - - - 23
Enel Romania Srl 4 - - - - 1
Enel Italia Srl 84 64 - 58 - 80
Enel Servizio Elettrico SpA 57 13 - - - 4
Enel Sole Srl 2 3 - 1 - 1
Enel Trade SpA 5 85 - - - 4
Enel.Factor SpA - 2 - - - -
Enel Insurance NV 1 - - - - -
Enel.si Srl 1 2 - - - -
Enelpower SpA - 3 - - - -
Endesa Energía SA 4 - - - - 4
Enersis SA 3 - - - - 2
Gas y Electricidad Generación SAU 1 - - - - 2
Nuove Energie Srl - 1 - - - -
Slovenské elektrárne AS 16 - - - - 7
Unión Eléctrica de Canarias Generación SAU 1 - - - - 1
Total 863 656 - 73 - 243
Other related parties
GSE 1 - - - - -
Fondazione Centro Studi Enel - - - - - 1
Total 1 - - - - 1
TOTAL 864 656 - 73 - 244
377Financial statements of Enel SpA
Financial relationships
2016
Millions of euro Receivables Payables Guarantees Costs Revenue Dividends
at Dec. 31, 2016 2016
Subsidiaries
Concert Srl - 2 - - - -
e-distribuzione SpA 1,668 13 3,725 13 84 1,610
Enel Energia SpA 6 791 1,733 - 6 358
Enel Iberoamérica SL 1 1 54 - 1 550
Enel Finance International NV 733 3,207 23,131 178 1,068 -
Enel Green Power Chile Ltda 3 3 - - - -
Enel Green Power International BV - - - 96 18 -
Enel Green Power North America Inc. - - 53 - - -
Enel Green Power SpA 578 18 10,596 3 33 50
Enel Green Power Perú SA 5 - - - 6 -
Enel Ingegneria e Ricerca SpA 19 - 30 - - -
Enel Investment Holding BV - 2 2 - - -
Enel M@p Srl 1 - 1 - - -
Enel Produzione SpA 463 30 2,412 19 29 304
Enel Italia Srl 83 - 94 - 6 -
Enel Servizio Elettrico SpA 334 - 1,701 - 7 -
Enel Sole Srl 1 70 231 - 1 -
Enel Trade Romania Srl - - 7 - - -
Enel Trade SpA 28 1,369 1,579 208 124 -
Enel Trade d.o.o. - - 1 - - -
Enel.Factor SpA 91 - - 2 3 3
Enel.Newhydro Srl - 16 1 - - -
Enel.si Srl 13 - 7 - - -
Enelpower SpA - 37 1 - - -
Nuove Energie Srl 20 - 86 - - -
OpEn Fiber SpA - - 123 - - -
Enel Oil & Gas SpA - 2 - - - -
3Sun Srl - - - 2 - -
Total 4,047 5,561 45,568 521 1,386 2,875
Other related parties
CESI SpA - - - - - 1
Total - - - - - 1
TOTAL 4,047 5,561 45,568 521 1,386 2,876
Annual Report 2016378
2015
Millions of euro Receivables Payables Guarantees Costs Revenue Dividends
at Dec. 31, 2015 2015
Subsidiaries
Enel Distribuzione SpA 165 890 3,719 2 48 1,245
Enel Energia SpA 9 395 1,087 - 10 159
Enel Iberoamérica SL 1 - - - 1 500
Enel Finance International NV 1,459 2,432 21,846 1,533 48 -
Enel Green Power Chile Ltda - - - 1 2 -
Enel Green Power International BV 107 - - - 13 -
Enel Green Power México S de RL de Cv - 3 - - 2 -
Enel Green Power North America Inc. - - 51 1 2 -
Enel Green Power SpA 331 7 1,804 67 132 109
Enel Ingegneria e Ricerca SpA 1 3 33 1 2 -
Enel Investment Holding BV 1 87 376 - 1 -
Enel Longanesi Developments Srl 28 - 2 - - -
Enel M@p Srl 1 - 1 - - -
Enel Produzione SpA 119 648 2,415 145 36 -
Enel Italia Srl 101 84 73 - 6 9
Enel Servizio Elettrico SpA 1,017 - 1,798 - 8 -
Enel Sole Srl 17 - 110 - 1 -
Enel Trade Romania Srl - - 8 - - -
Enel Trade SpA 47 364 1,560 497 347 -
Enel.Factor SpA 123 2 - 2 2 -
Enel.Newhydro Srl - 15 1 - - -
Enel.si Srl 4 - 36 - - -
Enelpower SpA - 36 1 - - -
Marcinelle Energie SA - - 8 - - -
Nuove Energie Srl 13 - 86 - - -
Enel Oil & Gas SpA - 2 - - - -
Total 3,544 4,968 35,015 2,249 661 2,022
Other related parties
Emittenti Titoli SpA - - - - - 1
CESI SpA - - - - - 1
Total - - - - - 2
TOTAL 3,544 4,968 35,015 2,249 661 2,024
The impact of transactions with related parties on the balance sheet, income statement and cash flows is reported in the
following tables.
379Financial statements of Enel SpA
Impact on balance sheetMillions of euro Total Related parties % of total Total Related parties % of total
at Dec. 31, 2016 at Dec. 31, 2015
Assets
Derivatives - non-current 2,469 953 38.6% 2,591 317 12.2%
Other non-current financial assets 53 27 50.9% 107 71 66.4%
Other non-current assets 188 154 81.9% 409 164 40.1%
Trade receivables 255 248 97.3% 283 278 98.2%
Derivatives - current 480 19 4.0% 299 26 8.7%
Other current financial assets 4,221 3,048 72.2% 3,403 3,130 92.0%
Other current assets 299 261 87.3% 460 422 91.7%
Liabilities
Long-term borrowings 13,664 1,200 8.8% 14,503 - -
Derivatives - non-current 3,082 747 24.2% 2,717 1,365 50.2%
Other non-current liabilities 36 33 91.7% 243 243 100.0%
Short-term borrowings 6,184 4,268 69.0% 4,914 3,243 66.0%
Trade payables 150 68 45.3% 164 59 36.0%
Derivatives - current 556 464 83.5% 367 276 75.2%
Other current financial liabilities 550 82 14.9% 643 84 13.1%
Other current liabilities 1,694 544 32.1% 1,046 354 33.8%
Impact on income statementMillions of euro Total Related parties % of total Total Related parties % of total
2016 2015
Revenue 207 205 99.0% 245 244 99.6%
Services and other operating expenses 335 78 23.3% 399 73 18.3%
Income from equity investments 2,882 2,876 99.8% 2,024 2,024 100.0%
Financial income on derivatives 2,787 1,239 44.5% 3,358 500 14.9%
Other financial income 556 147 26.4% 177 161 91.0%
Financial expense on derivatives 3,127 467 14.9% 3,024 2,248 74.3%
Other financial expense 979 54 5.5% 1,243 1 0.1%
Impact on cash flows Millions of euro Total Related parties % of total Total Related parties % of total
2016 2015
Cash flows from operating activities 2,511 (1,173) -46.7% 1,062 1,092 102.8%
Cash flows from investing/disinvesting activities (409) (409) 100.0% (560) (559) 99.8%
Cash flows from financing activities (4,989) 1,455 -29.2% (1,549) 29 -1.9%
Annual Report 2016380
36. Contractual commitments and guarantees Millions of euro
at Dec. 31, 2016 at Dec. 31, 2015 Change
Sureties and guarantees given:
- third parties 347 376 (29)
- subsidiaries 45,568 35,015 10,553
Total 45,915 35,391 10,524
Sureties granted to third parties regard guarantees issued by
the Parent Company as part of the disposal to third parties of
assets owned by Enel SpA or in the interest of its subsidiaries
and they essentially regard the sale of real estate assets (€346
million). The guarantee is meant to ensure the performance
of contractual obligations, specifically payments due and the
commitment to renew at least 50% of the long-term lease
agreements for six years.
Other sureties and guarantees issued on behalf of subsidiaries
include:
> €21,003 million issued on behalf of Enel Finance Interna-
tional securing bonds denominated in US dollars, pounds,
euros and yen as part of the €35 billion Global Medium-
Term Notes program;
> €9,397 million issued on behalf of various companies con-
trolled by Enel Green Power, mainly acquired in Group
reorganization operations;
> €2,810 million issued to the European Investment Bank
(EIB) for loans granted to e-distribuzione, Enel Produzio-
ne, Enel Green Power and Enel Sole;
> €1,997 issued to the tax authorities in respect of participa-
tion in the Group VAT procedure on behalf of Enel.NewHy-
dro, Enel Trade, Enel Produzione, Enelpower, Enel Servizio
Elettrico, Nuove Energie, Enel Ingegneria e Ricerca, Enel
M@p, Enel.si, Enel Green Power, Enel Sole and Energy Hy-
dro Piave;
> €2,127 million issued on behalf of Enel Finance Internatio-
nal to secure the Euro commercial paper program;
> €1,407 million in favor of Cassa Depositi e Prestiti issued
on behalf of e-distribuzione, which received the Enel Grid
Efficiency II loan;
> €1,150 million issued by Enel SpA to the Acquirente Unico
(Single Buyer) on behalf of Enel Servizio Elettrico for obli-
gations under the electricity purchase contract;
> €669 million issued to INPS on behalf of various Group
companies whose employees elected to participate in the
structural staff reduction plan (Article 4 of Law 92/2012);
> €524 million issued to Terna on behalf of e-distribuzione,
Enel Trade, Enel Produzione, Enel Green Power and Enel
Energia in respect of agreements for electricity transmis-
sion services;
> €347 million issued to Snam Rete Gas on behalf of Enel
Trade for gas transport capacity;
> €330 million as counter-guarantees in favor of the banks
that guaranteed the Energy Markets Operator (GME) on
behalf of Enel Trade and Enel Produzione;
> €80 million issued to RWE Supply & Trading GmbH on be-
half of Enel Trade for electricity purchases;
> €50 million issued to E.ON on behalf of Enel Trade for tra-
ding on the electricity market;
> €32 million issued to Wingas GmbH & CO.KG on behalf of
Enel Trade for the supply of gas;
> €3,645 million issued to various beneficiaries as part of
financial support activities by the Parent Company on be-
half of subsidiaries.
Compared with December 31, 2015, the increase in other su-
reties and guarantees issued on behalf of subsidiaries mainly
reflects the effects of the corporate finance transactions invol-
ving the Enel Green Power Group, which included the transfer
to Enel SpA of a number of guarantees issued by Enel Green
Power SpA on behalf of its subsidiaries.
In its capacity as the Parent Company, Enel SpA has also gran-
ted letters of patronage to a number of Group companies, es-
sentially for assignments of receivables.
381Financial statements of Enel SpA
37. Contingent liabilities and assetsPlease see note 49 to the consolidated financial statements for information on contingent liabilities and asset.
38. Events after the reporting datePlease see note 50 to the consolidated financial statements for information on events after the reporting date.
39. Fees of audit firm pursuant to Article 149-duodecies of the CONSOB “Issuers Regulation” Fees paid in 2016 by Enel SpA and its subsidiaries to the
audit firm and entities belonging to its network for services
are summarized in the following table, pursuant to the pro-
visions of Article 149-duodecies of the CONSOB “Issuers
Regulation”.
Type of service Entity providing the service Fees (millions of euro)
Enel SpA
Auditing of which:
- EY SpA 0.4
- entities of Ernst & Young Global Limited network -
Certification services of which:
- EY SpA 0.5
- entities of Ernst & Young Global Limited network -
Other services of which:
- EY SpA -
- entities of Ernst & Young Global Limited network -
Total 0.9
Enel SpA subsidiaries
Auditing of which:
- EY SpA 2.1
- entities of Ernst & Young Global Limited network 14.1
Certification services of which:
- EY SpA 1.3
- entities of Ernst & Young Global Limited network 1.8
Other services of which:
- EY SpA -
- entities of Ernst & Young Global Limited network 0.7
Total 20.0
TOTAL 20.9